Form D: Thousands Filed Every Year: Offerings Range from under $1 million to Unlimited

The money shown in the chart below is raised predominantly using Rule 506.

According to the SEC's findings issued in 2013, most Rule 506 offerings are small, relative, to other securities offerings.

We would not argue with the SEC's findings, which included also that there are a large number of Rule 506 offerings.

The SEC stated in its findings, "Based on the information submitted in 112,467 new and amended Form D filings between 2009 and 2012, there were 67,706 new Regulation D offerings by 49,740 unique issuers during this four-year period. [footnote omitted] The size of the average Regulation D offering during this period was approximately $30 million, whereas the size of the median offering was approximately $1.5 million. [footnote omitted] The difference between the average and median offering sizes indicates that the Regulation D market is comprised of many small offerings, which is consistent with the view that many smaller businesses are relying on Regulation D to raise capital, and a smaller number of much larger offerings."

A Significant Percentage of Public Companies Raise Capital under Rule 506

In 2013 the SEC found, "During the 2009-2011 period, approximately 10% of all public companies raised capital in Regulation D offerings; in 2012, approximately 6% of such companies did so. [footnote omitted]

Obviously a Public Company Can Conduct a Rule 506 Offering Fast and on a Lean Budget as Compared with a Registered Offering

The SEC finds, "These public companies [who conducted Rule 506 offerings] tended to be smaller and less profitable than their industry peers, which illustrates the significance of the private capital markets to smaller companies, whether public or private. [footnote omitted]"

 

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