Fintech company Allegiancy is launching a $30 million ‘mini-IPO’, made possible by new equity crowdraising rules approved last year by the Securities and Exchange Commission. The rules allow companies to raise up to $50 million in debt or equity securities from non-accredited investors through a Regulation A+ offering.
Richmond, Virginia-based Allegiancy offers an asset management platform for commercial real estate owners and investors. According to a statement, Allegiancy is only the second U.S. company to tap this new source of capital.
In February, Phoenix-based Elio Motors, a startup vehicle maker, raised $17 million through its mini-IPO crowdfunding raise
Richmond, Va., March 14, 2016 — Allegiancy is launching today from South by Southwest (SXSW) its $30 million new Regulation A+ `mini-IPO’ offering, becoming the second company in the U.S. after startup vehicle manufacturer Elio Motors to tap this new source of capital.
Speaking from the NextGen Crowdfunding Ignition 1.0 event at SXSW, Allegiancy CEO Steve Sadler described in the announcement how his active asset management firm will use the capital to attack inefficiencies in the $15 trillion commercial real estate industry.
The firm, in joining the likes of Twitter, Foursquare and Meerkat that previously announced launches from SXSW, is taking an aggressive, multi-prong strategy that combines crowdfunding with broker-dealer and institutional channels to raise the $30 million in capital.
Sadler’s announcement can be viewed via livestream at the NextGen Crowdfunding Ignition 1.0 website at: http://allegiancyipo.com
With the new capital, Allegiancy intends to acquire more companies, secure additional asset management contracts, hire more employees and continue to improve its proprietary technology for the benefit of property owners and investors.
Elio Motors is a Phoenix-based startup developing a three-wheeled, ultra-high-mileage car that raised $17 million through its recently completed mini-IPO crowdfunding raise. Elio shares are listed on OTC-QX and have traded up more than 300 percent since issuance.
In addition to crowdfunding, Allegiancy tapped brokers WR Hambrecht + Co., a firm at the forefront of the development and implementation of the new Reg A+ rules. In addition, Allegiancy partnered with Weild & Co., run by former NASDAQ Vice-Chairman and father of the JOBS Act David Weild, to reach institutional investors.
Allegiancy CEO Steve Sadler said his experience in a previous $5 million capital raise under the old Regulation A rules set the stage for this year’s mini-IPO raise. He’s the architect of Allegiancy’s coordinated effort to attract investors seeking an opportunity to invest in a firm with a laser focus on enhancing profitability in the commercial real estate industry and a track record of triple-digit growth.
“We’re synthesizing the best of all three strategies to deliver on the promise of the JOBS Act,” Sadler said. “This is a pivotal moment for American entrepreneurs and businesses. We’re at the forefront of what I believe could be a transformational moment in the American economy as forward leaning and visionary entrepreneurs tap into this revolutionary model of raising capital.”
Under the 2012 Jumpstart Our Business Startups Act, or JOBS Act, companies can raise up to $50 million in equity from investors — including non-accredited investors — under what’s known as the new “Reg A+” or “mini-IPO” rules. Previously, companies were limited to raising $5 million under the past Regulation A rules.
Under the previous Regulation A rules, Allegiancy raised $5 million in capital in 2014 to spur 400 percent growth for the company in 2015. With the injection of capital, Allegiancy doubled in size, tripled the number of its employees and then doubled its assets under management again last June when it closed its first asset management portfolio acquisition. Allegiancy’s tremendous growth earned the company a place in the top half of the 2015 Inc. 5000 list and its aggressive push into the new Reg A+ mini-IPO arena was covered in the Wall Street Journal.
Allegiancy is changing the business of asset management for commercial real estate owners and investors with radical specialization. With a technology-enabled operating platform and singular focus on serving as the owners’ advocate, the company brings fresh vigor and unparalleled discipline to a poorly understood business. Combining its proactive Value Assurance operational rigor with an intense focus on cash flow and profitability, Allegiancy is leveraging the experience of its principals of more than four decades of success.