Allegiancy launches a $30 million ‘mini-IPO’ offering under new rules

Allegiancy, a Richmond-based commercial real estate management firm, is the second company in the U.S. to tap into a new source of capital. On Monday, Allegiancy launched a $30 million, Regulation A+ “mini-IPO” offering, under new rules that allow companies to raise more money.

Speaking from an event at the South by Southwest conference in Austin, Texas, Allegiancy CEO Steve Sadler said his firm would use the capital to attack inefficiencies in the $15 trillion commercial real estate industry. He said Allegiancy is taking an aggressive, multi-prong strategy that combines crowdfunding with broker-dealer and institutional channels to raise the $30 million in capital.

Under the 2012 Jumpstart Our Business Startups Act, or JOBS Act, companies can raise up to $50 million in equity from investors — including non-accredited investors — under what’s known as the new Reg A+ or “mini-IPO” rules. Previously, companies were limited to raising $5 million under past Regulation A rules.

Elio Motors, a Phoenix-based startup developing a three-wheeled, high-mileage car, was the first company to tap funds under the new rule, recently raising $17 million.

With its new capital, Allegiancy intends to acquire more companies, secure additional asset management contracts, hire more employees and improve its proprietary technology for the benefit of property owners and investors. The company currently has a staff of about 19 people with $1 billion worth of assets under management.

Allegiancy is working with investment banker WR Hambrecht + Co., a San Franciso-based firm at the forefront of the development and implementation of the new Reg A+ rules. In addition, Allegiancy partnered with Weild & Co., run by David Weild, a former NASDAQ vice chairman and the father of the JOBS Act, to reach institutional investors.

Sadler said his experience in a previous $5 million capital raise under the old Regulation A rules set the stage for this year’s mini-IPO raise. “We’re synthesizing the best of all three strategies to deliver on the promise of the JOBS Act,” Sadler said in a statement. “This is a pivotal moment for American entrepreneurs and businesses. We’re at the forefront of what I believe could be a transformational moment in the American economy as forward leaning and visionary entrepreneurs tap into this revolutionary model of raising capital.”