Jason Paltrowitz on Equity Crowdfunding & Reg A+ IPOs
OTC Markets Group Executive Vice President Jason Paltrowitz took time to talk with Investor Town Hall while at the Crowd Invest Summit at the LA Convention Center. Paltrowitz discussed the recent developments in the equity crowdfunding space, whether going public is a good fit for a company and how OTC Markets provides educational market data and filings that help investors make decisions with transparency and trust.
Some key points from the interview:
– The number of Reg A+ listings on senior exchanges is a little concerning.
– Reg A+ is starting to take off as a way to get ideas to capital.
– Many large international companies trade on the OTC Markets to reduce the cost and complexity of trading in the US.
– OTC Markets should be viewed as the preferred market for early stage and development companies because;
A. The natural investor base for Reg A+ companies are self directed investor (not big funds). Reg A+ companies shouldn’t need to comply with rules that are designed to satisfy large investors.
B. Most Reg A companies are raising less than $20 million (and in many cases less than $10 million). The cost to be on a national exchange is $2.5 million the first year and $1.5 million every year after. It doesn’t make sense to spend all of the capital raised in a Reg A to be on an exchange that doesn’t fit Reg A type of companies.
– Companies are often delisted from National Exchanges because they listed too soon. It is better to start on the OTC and grow into an exchange listing than list too soon and fail.
Learn more HERE.