Many Reg A+ issuers struggle with the decision to use a broker-dealer as part of their offering.  There are cases for and against why you should or should not use one.  Lets discuss a few. 

Why Not to use a Broker-Dealer

  • The raise is minimal - If you are raising under $5M with a Reg A+ you should first ask yourself is Reg A+ the right mechanism.  But if you are sure Reg A+ s for you, and you have a good user base reaching a lower level is attainable without a broker-dealer.
  • User base - Broker-dealers are great for their connections and network.  But if you are a consumer products company with a 100K+ email list an engaged user base, you simply may not need the broker-dealer in your corner. 

Why you SHOULD use a Broker-Dealer

  • Large raise - Reg A+ companies have not shown the ability to raise large sums of money from the crowd.  If you are trying to raise $10M+ you will likely need big investors to come on board.  The broker-dealers can bring that in. 
  • Valuation - BD's can help you with selecting an appropriate valuation that is attractive to the market. 
  • Going Public - Reg A+ can be used to go onto a national exchange (i.e. NASDAQ or NYSE) or the OTC.  However, if you want to go to a national exchange, you need BD to sponsor you. 

A final thought.  Even if you want to use a BD, not all BD's want you as a client.  BD's are selective in who they work with.  Some more than others.  You need to find one that is familiar with your industry and goals.  It will likely take talking to a few to find one that is right for your company.