JOBS Act Converting Customers into Shareholders


Startup companies are using Regulation A Plus offerings as a marketing tool and turning customers into investors, Bloomberg BNA’s Stephen Joyce reports.

Startup executives and their lawyers told Bloomberg BNA that constructing a community of enthusiastic consumers who can spread the word about products, sometimes using social media, can lead to a flourishing investor base and in time catapult firms to an initial public offering.

“Reg A is developing a lot differently than I expected and a lot of my colleagues expected,” securities specialist Anna Pinedo, Morrison Foerster LLP, New York, told Bloomberg BNA. “Thus far, the motivation behind most of the companies using Reg A are affinity-based or customer-based offerings. They want their customers to be their shareholders. That was unexpected,” she said.

Read more about how startups are using Regulation A Plus here.