The information contained herein is the confidential and proprietary information of WRH+Co. Any use, reproduction, dissemination or 

disclosure of the information contained herein is strictly prohibited. 

May 10th, 2017

Presentation to 

SEC Advisory Committee on 

Small and Emerging Companies
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"I want to challenge entrepreneurs to revolutionize the 

new-issue process, urging them to come public early 

and let the public participate..." 

-- Bill Hambrecht
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Regulation A+ Presentation Outline

WRH+Co – Overview

• Heritage & Culture

• Data-driven Selection Process

Reg A+ Review and Experience

• Case Studies

What We Have Learned

Recommendations
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WR Hambrecht +Co, like Hambrecht &Quist before

it, has consistently identified new trends and

business opportunities throughout its history.

WRH+Co was founded inJanuary 1998 to level the

playing field for investors and our corporate clients.

Our Founder, Bill Hambrecht, is aSiliconValley pioneer

that has been financing growth companies from Apple

toGoogle during his time at Hambrecht &Quist and

WRH+Co.

WRH+Co has been focused on opening up the investing 

world to as many people as possible at fair market 

prices and was instrumental in reforming Regulation A 

to help accomplish that for growth companies and 

investors. Bill Hambrecht was influential in the 

structure and implementation of the JOBS Act, and his 

remarks and letters were cited over 40 times in the 

SEC’s release of the final rule. 

Fromthefolkswho

broughtyouApple, 

Adobeand

Genentech...
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WR Hambrecht + Co Guiding Principles

Throughout our history, WRH+Co has been an innovative leader

with a core philosophy based on three tenets:

• Identifying exceptional companies

• Helping them raise capital and go public early

• Delivering efficient market pricing
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Public Markets Once Embraced 

Emerging Growth Companies

In July 1986, Adobe Systems filed to sell 

500,000 shares and raise approximately 

$5.5 million (~$13 million in 2017 dollars)

• At the time, the company was four 

years old and had 49 employees

• The public markets provided Adobe 

with the capital to grow, create jobs 

and stay independent of OEMs

In February 21, 2017, Adobe Systems 

now has a market capitalization of over 

$59 billion and 2016 revenue of $5.8 

billion

• Currently, Adobe has over 15,000 

employees and is consistently 

named a top place to work

• Adobe has a 23% annualized return 

since inception; $100 invested in 

Adobe in 1986 would now be worth 

approximately $40,000

Other Sub- $50MM IPOs:

Starbucks

AOL

Peet’s Coffee

Whole Foods

Panera Bread

Odwalla

Intel

Amgen

Oracle

Cisco
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Data-Driven Selection Process

• WRH+Co draws on predictive data science and thoroughly vetted statistical 

pattern recognition in the screening and selection of its investments 

• Algorithms and technologies stem from research breakthroughs in 2007 –

2008 between data scientist Thomas Thurston, then at Intel Capital, and 

Professor Clayton Christensen (HBS)

• Empirical processes have been applied in over 3,000 real-world predictions to 

date, forecasting new innovation survival or failure with significantly greater 

accuracy than the corresponding VC industry benchmark of 70-80% portfolio 

failure within 10 years of initial funding

• Joint development with investors Bill and Elizabeth Hambrecht since 2008 has 

continued to enhance these capabilities while simultaneously demonstrating 

their efficacy in VC and public markets alike
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Reg A+ to Date

• SEC published final rules in June of 2015

• 140+ filings seeking to raise $2.6 billion

• 14 withdrawals

• Real Estate has the most filings as a class 

• Elio Motors is the only traded A+ IPO (OTCQX); $17 million raised, 6,000 investors

• Largest raise for the real estate company Fundrise at $50 million

• Crowdsourcing is evolving

Common misconception remains in the marketplace: 

Reg A+ is “Crowdfunding” or necessarily includes some crowdfunding component
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Reg A+ Distribution Strategy
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WRH+Co Case Studies : Elio

Self-sponsored, self marketed offering (no underwriter or broker/dealer support)

100% retail distribution

• 6,300 investors, 60% reservation-holders for Elio vehicle

• Average purchase ~ 200 shares

• Total capital raised of $16.7 million

WRH+Co facilitated Secondary Trading on OTX QX Market

• DTC eligibility

• 15c211 for permission to quote

• Served as market-maker
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WRH+Co Case Studies: Aperion

Strategy

• Institutional and retail marketing 

• Structured similar to traditional registered offering

• “All or None” w/ price range (3.1mm shares @ $7-$9)

• Targeted Nasdaq listing

Experience

• Encountered institutional resistance due to lack of familiarity with Reg A+

• Found strong retail demand for Nasdaq-listed offering

• Uncovered institutional interest late in process, but not enough to complete offering

• Never sought qualification 
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WRH+Co Case Studies: Allegiancy

Strategy

• Min – Max Offering (~$15-30mm)

• Company committed to extensive retail and crowd marketing effort

• Minimal institutional marketing

• Intention to quote on OTCQX

Experience

• Despite concerted marketing effort, crowd participation was limited

• Brokers declined to participate in “unlisted” offering

• Did not meet minimum offering size 
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WRH+Co Case Studies: BeautyKind

Strategy

• Min – Max Offering ($5-10mm)

• Strong B-to-C marketing component (Support for charitable causes)

• Intention to quote on OTCQX

Experience

• Very limited broker participation

• Crowd participation proved unpredictable
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WRH+Co Case Studies: NewsBeat Social

Strategy

• Min – Max offering ($1-50mm)

• Leverage established world-wide fan base of nearly 4 million viewers

• Targeted Nasdaq listing

• Sequenced marketing effort

Experience

• Conversion from fans to investors proved challenging

• Despite low minimum, Nasdaq listing standards imposed higher “floor”

• Never pursued broker and institutional channels 
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WRH+Co Case Studies: ShiftPixy

Strategy

• Traditionally marketed offering including all investor channels

• Min – Max structure ($15-50mm)

• Nasdaq-listed (set minimum to reflect qualification requirement)

Experience

• Offering met institutional standards (approx. 50 roadshow meetings)

• General acceptance of Reg A+, but confusion/concern regarding fixed price

• Strong retail participation

• Investors yet to embrace early-stage entrants to public market 
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What have we learned?

• Large numbers of issuers consider Reg A+ an attractive alternative to private financing or 

registered offering

• Promise of less expensive, more efficient pathway to public offering has largely been realized

• Distribution of Reg A+ offerings remains challenging

• Institutions not relevant or appropriate for many deals

• Broker-dealers generally will not participate in “unlisted” deals

• Crowd is highly unpredictable

• Disconnect remains between issuers, investors, brokers and underwriters regarding 

benefit/value of Reg A+

• Marketing spend not a panacea
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Recommendations

• Continued support of Reg A+ via cooperation, education and data 

dissemination

• Consider efforts to differentiate Reg A+ securities from broader “unlisted” 

market

• Distinctions for underwritten offerings?

• DTC eligibility standard?

• Book-entry vs. physical certificates?

• Emphasize protection against fraudulent offerings

• Attempt to better clarify differences between Reg A+ and crowdfunding