January 15th was the deadline for companies to file their fund raising activity initiated in 2013 under regulation D with the SEC. 2013 overall seems to have been a good year for US private companies relying on an exemptions for their private placements. There were 8,372 offerings launched by US based private SMBs in 2013 (25.4% increase vs. 2012) for $64.7 billion. 7,827 events (19.5% increase) were reported raising $36.5 billion (8.17% increase).
The segment for offerings on or below $1 million followed the same pattern with a 22% increase in amount offered ($1.9 billion) via 3,519 placements. It took two years for the amounts offered to rebound and outpace 2010 levels, though amounts raised remained pretty stable from 2010 to 2012. This anomaly is perhaps due to companies having a more conservative approach when capping fund raising events during uncertain times. In 2013, 3,519 events were reported raising $1.15 billion, representing a 25% increase over 2012.
Offerings on or below $1 million while they account only for 3% of the amount offered in 2013 by US based private SMBs, represent 42% of the activity in 2013. Companies behind these offerings are young. 80% of the time they are at most five years old and those founded within two years account for 54% (65% and 37% respectively in other segments). We continue to believe this is the segment with the most potential to unearth up and coming companies and the segment poised for growth once the JOBS Act is fully implemented by the SEC.
Offering sizes are adjusted to take into account offering decreases or increases reported by the company in follow-on filings. Offering sizes are generally accounted for at the time securities are sold for the first time or if launched at the time of disclosure. Variations in amount raised reported in follow-on filings are accounted for at the time of their disclosure. Public companies are not included. Security issuances related to mergers or business consolidation were excluded.