Impact of new rules: Realty Mogul benefits
In July, the U.S. Securities and Exchange Commission (SEC), passed an amendment that lifted the 80 year ban on the general solicitation and advertising of Regulation D (“Reg D”) offerings which will go into effect in early September.
While most analysts have focused on hedge funds, the ruling reduces many of the limitations that equity crowdfunding sites have been restricted by – a huge win for companies seeking alternative financing.
One such company is Realty Mogul, Co., a marketplace for accredited investors to pool money online and buy shares of pre-vetted investment properties.
Exactly what the new rules change for Realty Mogul
To examine specifically how the new rule changes will impact the crowdfunding world in a few weeks, Realty Mogul CEO, Jilliene Helman outlines a series of changes that will now take place:
- Existing Marketing Efforts: We don’t have to be so secretive about our deals and rely on word of mouth as much as we have in the past. We can disclose more meaningful and factual information with our existing ad campaigns. Before, we could only advertise to people about our company, not about our offerings, now we can choose to advertise not only about the company but also about the opportunities on our platform, which is really what investors want to see to begin what.
- New Marketing Opportunities: Billboards, Newspaper Ads, Skywriting…we can reach the masses and let everyone know what the opportunities are with the Realty Mogul Platform.
- Changes to our Business Model: We know that investors are always looking for opportunities to invest their money. But before the onus was on the investor to visit our website, register and verify their accredited investor status before they were able to learn what types of opportunities they had available to them in the first place. Now, through our ability to market to the general public, potential investors can discover what some of the potential opportunities that exist on our platform are and then make the decision for themselves whether it’s worth the time to come to our website, register and verify their accredited investor status.
- Complying with the New Regulations: When we take advantage of the benefits of general solicitation, we have to be very diligent in our compliance with the new rules and regulations that accompany general solicitation. Accredited investors are still the only ones that can invest with us under the new SEC rules and the new rules require us to be more diligent than ever in determining accreditation correctly.
Helman adds, “We expect that once general solicitation takes effect we will see exponential growth in our investor base of accredited investors and continue to build relationships with non-accredited investors in advance of the final rules from the SEC around Title III and allowing non-accredited investors to invest.”