Why More Founders and Sponsors Are Exploring Side-by-Side Offerings
Most founders begin the fundraising process with a fairly simple objective: raise enough capital to execute the business plan.
Whether the goal is launching a startup, acquiring an asset or business, expanding a franchise, developing a real estate project, or purchasing an apartment complex, the conversation usually starts with one question: where is the money going to come from?
What many founders and sponsors eventually discover is that not all capital serves the same purpose.
Some capital brings visibility. Some capital brings customers. Some capital brings community engagement. Some capital brings larger checks capable of funding meaningful growth. As fundraising strategies continue evolving, more companies are beginning to recognize that different investor audiences can serve different roles within the same capital raising campaign.
For years, many issuers assumed they had to choose between Regulation Crowdfunding (Reg CF) and Regulation D Rule 506(c). If they wanted access to retail investors, they pursued Reg CF. If they wanted accredited investors capable of writing larger checks, they pursued Rule 506(c). The assumption was that a single offering structure needed to carry the entire raise. The reality may be more nuanced than that.
Why Side-by-Side Offerings Are Attracting Attention
The concept of a side-by-side itself is relatively straightforward. Separate offerings operate simultaneously while supporting the same overall business objective. The offerings remain separate. The investor qualification requirements remain separate. The compliance obligations remain separate. What they may share is the same underlying company, project, or investment opportunity.
For founders and real estate sponsors, the attraction is obvious.
Instead of viewing fundraising as a choice between retail investors and accredited investors, side-by-side structures create the possibility of serving both audiences through different offering frameworks.
A real estate syndication provides a useful example.
One of our clients launched a broad marketing campaign centered around a multifamily acquisition opportunity. Educational content, webinars, social media outreach, and investor communications generated significant interest from both accredited and non-accredited investors.
The sponsor recognized that not every interested investor fit the same profile. Larger investors contributing $100,000 or more were offered a different investment structure with a better return. Smaller investors were still able to participate through a separate offering structure with minimum investments beginning around $10,000.
Rather than forcing every investor into the same framework, the sponsor utilized separate exemptions designed for different investor audiences while supporting the same overall acquisition.
The result was a successful capitalization effort exceeding $6+ million.
More importantly, the sponsor did not have to ignore interested investors simply because they weren’t accredited investors.
The Business Marketing Power of Reg CF
One of the most interesting developments surrounding Reg CF is that many companies discover they are accomplishing more than simply raising money.
A successful Reg CF campaign often functions as a marketing campaign at the same time.
Investors become advocates and customers. Supporters begin sharing the sponsor’s story with friends, family members, and business contacts. Founders who initially focused on fundraising sometimes discover that the awareness generated by the campaign becomes one of the most valuable outcomes.
This dynamic is particularly powerful for real estate businesses as well as consumer facing businesses. A company selling products, services, memberships, software, or experiences can create a community of people who are financially invested in the success of the business. The investor is no longer simply a customer. They become a stakeholder.
That creates a very different relationship than traditional fundraising alone. The marketing value can be substantial. Sponsors and founders often gain exposure through social media sharing, email campaigns, webinars, podcasts, media coverage, and word-of-mouth referrals that develop throughout the crowdfunding process. While the capital itself remains important, many founders find themselves equally excited about the visibility and momentum being created around the brand.
Why Accredited Investors Often Serve a Different Purpose
Accredited investors frequently play a very different role within a company’s growth strategy.
While a Reg CF campaign may attract hundreds of smaller investors, accredited investors often provide larger investments that support significant growth initiatives. For businesses, hiring employees, purchasing inventory, expanding operations, acquiring businesses, developing technology, and pursuing larger opportunities often require substantial capital commitments.
A founder may be thrilled to have hundreds of investors supporting the business. At the same time, a handful of accredited investors writing larger checks can dramatically change the trajectory of a company.
Neither approach is inherently better than the other. They simply serve different purposes. That distinction becomes increasingly important as businesses mature. The same company that benefits from broad public participation may also require larger accredited investments to execute more aggressive growth plans.
Rather than viewing those investor groups as competing with one another, some issuers are beginning to view them as complementary.
Integration Questions Appear
Whenever side-by-side offerings are discussed, integration concerns inevitably follow.
Historically, securities attorneys spent considerable time evaluating whether multiple offerings should be integrated and treated as a single offering. If separate offerings became integrated, the requirements of one exemption could potentially affect the validity of another.
For many years, that concern caused issuers to take an extremely conservative approach. The practical result was that many founders and sponsors were taught to avoid running multiple offerings around the same opportunity altogether. That understanding continues to influence how many people think about fundraising today.
One of the most significant developments came through the SEC’s modernization efforts and the adoption of Rule 152 in 2021.
While the rule itself is highly technical, the practical impact is easier to understand. The analysis shifted away from simply asking whether multiple offerings existed at the same time. Greater emphasis is now placed on whether each offering independently satisfies the requirements of its exemption.
That distinction matters. For many founders and sponsors, this created considerably more flexibility than they realized existed.
This Is Not About Combining Exemptions
One of the most common misconceptions surrounding side-by-side offerings is that issuers are somehow combining multiple exemptions into a single offering.
That is not what is happening.
The offerings remain separate. The investor qualification standards remain separate. The documentation remains separate. The compliance obligations remain separate.
What may be shared is the underlying business objective.
That distinction is important because the strategy is not designed to avoid securities laws. The strategy is designed to operate within them while recognizing that different investor audiences often require different approaches.
The flexibility comes from proper structuring, not from ignoring compliance requirements.
Why Some Founders Still Consider Regulation A
When founders first learn about side-by-side structures, many immediately ask whether Regulation A might accomplish the same objective.
In some situations, it can.
The challenge is that Regulation A often requires significantly more time, expense, and regulatory review before an offering can move forward. Audited financial statements, SEC qualification, ongoing reporting requirements, and a longer launch timeline can create obstacles that many early-stage companies and individual projects are not prepared to navigate.
For larger long-term capital raising programs, Regulation A is an excellent solution.
For many founders and sponsors seeking flexibility today, however, side-by-side structures often become part of the conversation because they may provide a different path forward.
Compliance Still Matters
One of the biggest mistakes an issuer can make is viewing side-by-side offerings as a shortcut. They are not.
If anything, the additional flexibility makes proper legal structuring even more important. Investor qualification procedures still matter. Offering documentation still matters. Marketing activities still matter. Compliance oversight still matters.
That reality is one of the reasons experienced securities counsel becomes particularly important when these strategies are being evaluated. Every exemption involved in the structure must continue satisfying its own requirements throughout the life of the offering.
Flexibility and compliance are not competing objectives. They work together.
Final Thoughts
The fundraising landscape continues evolving.
Companies are building audiences through social media, webinars, podcasts, newsletters, online communities, and digital marketing campaigns in ways that would have been difficult to imagine twenty years ago. At the same time, investors themselves are becoming increasingly diverse. Some want to invest smaller amounts and support businesses they believe in. Others are looking for larger investment opportunities capable of generating meaningful returns.
The question for many founders is no longer simply how to raise capital.
The question is how to build a capital raising strategy that aligns with the different audiences they hope to reach.
For some issuers, side-by-side offerings may become part of that answer.
If you’re considering a Reg CF offering, Rule 506(c) raise, startup financing strategy, business acquisition fundraise, real estate syndication, or other securities offering structure, feel free to schedule a consultation with our team to discuss your options.
Attorney Advertising. This article is for educational purposes only and is not legal advice.