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Last Update: Saturday September 18, 2021

Small Corporate Offering Registration (SCOR): Reg D Rule 504

This SCOR Is All About Raising Capital

Austin, Texas:  The Securities Exchange Commission (SEC) instrument known as Small Corporate Offering Registration (SCOR), sometimes referred to as Reg D Rule 504, is a little-known, but a potentially important tool for a small business owner.   Mandated by Congress, every year since 1982 the SEC has held an annual meeting for small business investors and owners called "Small Business Capital Formation Conference."   The first result of that conference was the Reg D Rule 504.

 Deborah Bortner (pictured above) is the Securities Administrator for the State of Washington.  In 1992,she led the way to simplify the registration by developing the SCOR document.  At that time Congress wanted to help small business owner who have a difficult time finding money.  Another aspect of the SCOR is use it as a liquidity model that forces a business valuation. It could also be used as an exit strategy.  The majority of small business owners do not have a succession plan and a SCOR would necessitate that such a plan be implemented.

Historically, out of every $100 in banks loan, small business gets about $7. Though contributing over 50% of the Gross National Product,  working capital is often difficult to obtain.

The SCOR has not caught on. There is very little publicity about it and just a few educational resources. It does require three years of audited financials. It does involve your CPA and a good securities lawyer. 

The SCOR could be used in the following ways:
1.  A cornerstone of a succession plan and liquidity model for mature small businesses,
2. An alternative to an employee-stock ownership program,
3. A means for all those who already want to buy into a business to do so without going through an IPO and without necessarily being a qualified investor, and,
4. An instrument to provide a conservative diversification strategy for pension funds, mutual funds, and private investors.

Learn How Money Works

5:23 | Play Now | Blue Whale Moving attracted the attention of a customer, an attorney looking for a business to invest in.

Study the Small Corporate Offering Registration Option

2:43 | Play Now | Brad Armstrong invested in Blue Whale and then used the Small Corporate Offering Registration as a way to raise more cash.

Find A Few Experts

2:41 | Play Now | David Porter is a stock broker who took on the task of using a Small Corporate Offering Registration to raise money for Blue Whale. 

Learn How Your State SEC Operates

2:25 | Play Now | | Deborah Bortner, Securities Commissioner in the State of Washington, explains how the SCOR (Small Corporate Offering Registration) works. 

Find Others Who Believe In You

2:29 | Play Now | Hattie says that there is nothing better for owners than an enthusiastic and knowlegable fan club.

Tell Your Story Well

5:23 | Play Now | Jonathan Langley has a great story to tell investors.

Invest In A SCOR and Receive Tax Advantages

2:48 | Play Now | Broker David Porter explains the tax advantages with a SCOR.  

Footnote:     Because of the ubiquity of the web, Small Business School will promote any and all attempts to develop mechanisms so the best small businesses are indexed against one another and the best among the best rise to the top and are immediately qualified to be selected by any investor to receive equity capital. It will change business in the USA forever.  

Small business can participate in this equity model.  

Learn about liquidity models. Understand your financials and key critical ratios, and then participate in the market just like any big business.