Recently, I filed Advance Comments with the Securities and Exchange Commission to share a tech company’s perspective on how Reg A+ could be drafted to help growth companies like Fallbrook Technologies. As Chairman and CEO of Fallbrook Technologies, I spend a substantial portion of my time evaluating options for capital, so I am well aware of the issues. If the SEC’s Reg A+ rules are user-friendly and provide a national platform for raising capital, high-growth companies like Fallbrook can use Reg A+ to help boost the economy by creating new American jobs, expanding R&D efforts, and driving innovation faster.
We are grateful that the SEC created the opportunity for Advance Comments on various JOBS Act provisions. In my comments, I suggested that the SEC focus on the following four factors as it crafts Reg A+ rules to raise the “mini-IPO” cap from $5 million to $50 million as required by Title IV of the JOBS Act:
First, the SEC should strive to make Reg A+ rules simple and user-friendly, eliminating the need for growing companies to expend undue resources on decoding complex and cumbersome regulatory changes.
Second, because the Internet and social media allow a growing company’s message to rapidly spread across the U.S., the SEC should preempt state securities laws. For a growing company, numerous multi-state filings are extremely difficult to navigate and execute correctly, further siphoning away scarce resources needed to advance innovation and create jobs.
Third, because the increased Reg A+ cap provides better scalability options for companies that are growing beyond their earliest stages, Reg A+ rules should continue to be a top priority for the SEC.
Finally, reporting requirements should insist on reasonable detail and transparency, but should not be so frequent or complex as to be burdensome.
Fallbrook Technologies strongly supports the ideals the President and Congress expressed in passing the bipartisan JOBS Act. We are ready to make those promises a reality.
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William G. Klehm is the Chairman and CEO of Fallbrook Technologies. Fallbrook Technologies is an emerging manufacturing and technology development company dedicated to improving the flexibility of power transmission within a wide variety of mechanical devices. Based in Cedar Park, Texas, near Austin, Fallbrook’s award-winning NuVinci® continuously variable planetary (CVP) transmission system is a standard component on more than 60 major bicycle brands throughout Europe, and is potentially applicable to improving the performance and efficiency of virtually any product that uses a transmission, such as light electric vehicles, outdoor power equipment, agricultural equipment, automobiles, and wind turbines.