My Trail Company will be raising capital through a Direct Public Offering (DPO) open to Colorado residents.
A DPO is like an Initial Public Offering (IPO) except that instead of the company selling its shares to an underwriter(s) who then marks them up and sells them to the public, the company sells the shares directly to the public. The cost savings in this process can create value for both the company and investors.
- DPOs have been around for decades – Ben & Jerry’s did one in 1984 for example, to residents of Vermont.
- A Direct Public Offering (DPO) allows organizations to offer investment opportunities to the public. It’s part of a growing movement to move money from Wall Street to local businesses and investors.
- DPOs are a type of crowd funding that allow an organization to raise money from a large number of investors with each investor putting in a relatively small amount.
- It’s different than Kickstarter, Indiegogo or Crowdfunder. These sites only allow supporters to contribute donations, or pre-purchase products, not invest with potential financial returns.
- To avoid burdensome federal regulations, organizations generally limit themselves to a maximum of 500 unaccredited investors and 2000 total investors including accredited.
- Accredited individual investors meet at least one of two criteria:
Any organization can do a DPO (for-profit, non-profit, co-op, benefit corporation . . .) as long as it can pay a return to investors.
DPO investors are typically offered a 3-4% return in the form of interest or dividends. My Trail is offering investors 10% annual dividends, which will either be paid in cash or accrue from year to year and be paid upon a liquidation or certain types of redemption. In addition, investors will receive a 20% discount on product purchases.
Investors can generally receive their original investment back by either:
- Have a net worth of more than $1 million either independently or with a spouse.
- Earned more than $200,000 per year as an individual for the past two years, or $300,000 per year together with a spouse for the past two years.
Organizations can raise money from one state, or across multiple states, using a DPO but must comply with state-by-state and Federal regulations as applicable.
My Trail Company has only filed an application with the state of Colorado and thus will only be able to raise funds from Colorado residents.
- selling securities back to organization, or
- selling their securities to another investor.
My Trail Company is working closely with Cutting Edge Capital, the nationally recognized DPO experts. To learn more about DPOs, please go to cuttingedgecapital.com.
Here are some other companies that have raised capital through DPOs, and an article about Ben & Jerry's growing their business with a DPO.
Interested Investors, whose primary residence is in Colorado, should click the button below. Then, by clicking on "Get Started," your eligibility will be confirmed and you will be able to read all documents. Check back for updates and comments.
Please email any questions to: firstname.lastname@example.org.