On September 10th, 2019, Blockstack announced that its SEC-qualified token offering has ended. More than 4,500 financiers, including retail investors in the U.S, took part in the offering, which raised around $23 million.
Blockstack also revealed that it strategically targeted investors from Asia, which may result in an additional $5 million via either a separate private placement or a follow-on SEC-qualified offering.
Explaining the momentous move, Muneeb Ali, CEO of the startup, said:
“Our goals for working with regulators in the States were twofold. Primarily, we wanted to reach more retail investors who can be users of our network, and have a financial stake in the success of our ecosystem.”
He added that Blockstak recognized Asia as a priority market and that their SEC qualification added weight to an imminent strategic move toward Asia.
Blockstack is expected to use the funds to fuel platform growth and increase their computing network. They also plan to distribute Stacks Tokens (STX) to developers who are building dApps on the network.
The Blockchain startup now becomes the first company to conduct a token offering in the U.S under the SEC Reg A+ compliance rules.
Reg A+ Token Offering Explained
Blockstack recently announced that it had received SEC approval to launch the first-ever Reg A+ token offering. Under Reg A+, an issuer may raise to $50 million from both accredited and non-accredited investors.
A regulation A+ funding round is an alternative to an initial public offering (IPO) tailor-made for companies in need of early financing, in which any member of the public can participate.
Importantly, after a Reg A+ offering is closed, the assets may trade on an exchange, which is a significant characteristic that allows token holders to create liquidity quickly.
Blockstack held a Reg D offering back in 2017, which was restricted to accredited investors. However, one of the startup’s goals was to widen the path of investment opportunity to non-accredited investors.
The recent Reg A+ offering finally allowed retail investors to participate in an offering for the first time.
Institutional investors comprised of Lux Capital, Recruit Holdings, Arrington Capital, Hashkey Group, Frontier Ventures, Spartan Group, and others.
Blockstack’s achievement to gain Reg A+ approval from a major regulator marks a new era for cryptocurrency and blockchain.