Glossary
Rolling close
What a rolling close is, how it lets a company take funds before an offering ends, and the conditions that apply under Reg CF and Reg A+.
A rolling close is a closing of part of an offering, releasing the funds committed so far to the company and issuing securities to those investors, while the offering stays open for more. A raise may have several rolling closes before its final one. The alternative is a single close at the end.
Regulation Crowdfunding
In Regulation Crowdfunding no money can be released until the target amount is met, and the offering materials must have been public for at least 21 days. SEC staff guidance for intermediaries permits an issuer that has met its target to hold an early close and then additional closings up to its disclosed maximum, provided each closing follows the early-close conditions of Rule 304(b): investors get notice of the new deadline at least five business days ahead, they may cancel until 48 hours before it, and the company continues to meet the target at the time of closing. The Form C should disclose the possibility, and the intermediary has to support it.
Regulation A+
Regulation A+ allows continuous offerings, and an offering without a minimum can close on a rolling basis as investments are accepted, as its offering-circular describes. Where there is a minimum, funds are held in escrow until it is reached.
Why it matters to a raise
A rolling close gets money to the company sooner and turns commitments into completed investments that can no longer be cancelled. Each close is also a milestone the company may announce, if the announcement is accurate and permitted. See oversubscription and investment-cancellation.
Further reading
- Oversubscription in a raise
- Counsel throughout the offering
This page is general information about securities rules, not legal advice. Whether a particular offering may close on a rolling basis depends on its documents and its intermediary.