Market Overview

Own a Piece of Chicken Soup for the Soul


Whether you are one of the company’s loyal 2.6 million Facebook followers or one of the millions that have read their books, you have undoubtedly heard of “Chicken Soup for the Soul”. Now you have the opportunity to be one of the first to invest in the private company before it moves up to a publicly traded stock exchange.

The company, Chicken Soup for the Soul Entertainment, filed paperwork to raise up to $30 million through a Reg A+ equity offering. The filing reveals the company would have a value near $150 million and is selling a piece of the company for $12 per share.

What is a Reg A+ offering?

In June of 2015, Title IV (also referred to as Regulation A+), of the JOBS Act was officially passed and opened the door to a new world of investing and raising money. Before Reg A+, only accredited investors had the opportunity to invest in private companies. That all changed two years ago and now private companies have the ability to offer all Americans the chance to invest in what could be the next big thing.

Reg A+ has changed the way private companies raise money and at the same time how investors invest in early stage companies. Prior to new legislation, private companies attempting to raise money were limited to the top 2% of Americans based on wealth. And at the same time 98% of the country was denied access to private investing in startups because the government deemed only the wealthy were worthy of that opportunity.

Companies that choose to take advantage of Reg A+ must first get approval from the SEC before they launch what the industry is referring to as a mini-IPO. Once approved, the company can offer a piece of the company to John Q. Public in a small town in Kansas and can avoid paying high fees from Wall Street firms or competing with tech giants in Silicon Valley. This is a big win for small companies that were turned down by the “big guys” in the past.

The average investor also wins because now they have the choice of investing just like the wealthy have been for decades. Imagine having the opportunity to invest in Facebook years before it went public and is now one of the largest tech companies in the world. And the great part about Reg A+ is that most companies will set their minimum invest below $1,000 – making it accessible for the mass public.

Cashing Out

One of the concerns from investors is liquidity. Once they invest in a company through a Reg A+ offering, how can they sell their shares. The ultimate goal of most companies, including Chicken Soup for the Soul Entertainment is to list on a public stock exchange once the offering is complete. This will allow investors the ability to sell their shares on the open market. Chicken Soup for the Soul Entertainment plans to list its shares on the Nasdaq Global Market under the symbol CSSE once it completes its Reg A+ offering. There is no guarantee the company will be approved by the Nasdaq for the global exchange, but if not it will still likely list on one of the Nasdaq’s lower exchanges for smaller companies.

In the two years since Reg A+ has been available, it has not taken off like many had predicted. That being said, there has been hundreds of millions of dollars raised and activity is picking up. If a household name such as Chicken Soup for the Soul Entertainment can be successful in their offering it will be the catalyst the sector needs to get to the next level.

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Previews Crowdsourcing Startups Small Business Trading Ideas General


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