Raising capital to pay for expansion plans sometimes can be a major hurdle for smaller companies that aren’t publicly traded on the stock exchanges.

But a new investor option is making the path less formidable for these smaller businesses with big dreams.

Revised rules adopted by the Securities and Exchange Commission went into effect over the summer, allowing those companies to sell up to $50 million of securities in a 12-month period, and allowing everyday citizens to be the investors.

Already some companies have positioned themselves to take advantage.

“We are excited about this because it gives us easier access to capital without having to be listed on the trading markets,” says Derek Diasti, chief executive officer of Sun Dental Labs (www.sundentallabs.com), a Florida company that was one of the first in the nation to receive SEC qualification to move forward with a Tier 2 securities offering under the change.

“Anyone can invest in this company, so this democratizes investing. You don’t have to be a millionaire to get involved.”

The new rules were a long time in coming. They were mandated as part of the Jumpstart Our Business Startups (JOBS) Act passed by Congress in 2012. But the SEC took nearly three years to craft the details as regulators tried to balance giving businesses an effective capital-raising strategy, while still providing strong investor protections.

The rules update and expand what was known as Regulation A under the Securities Act of 1933. The rules allow for two tiers of securities offerings:

• Tier 1. This lets companies offer and sell up to $20 million in securities over a 12-month period to accredited investors (high-net-worth individuals, banks and large corporations) and non-accredited investors (those of more modest means). Similar to the original Regulation A, Tier 1 does not require audited financial statements, does not limit the amount that can be invested by a non-accredited investor and does not require ongoing reporting. Issuers are required to register securities with each state in which they sell securities.

• Tier 2. This increases to $50 million the amount of securities that companies can offer and sell. Tier 2 offerings preempt state registration requirements, but the companies must file audited financial statements with the SEC. Once an offering is complete, ongoing reporting requirements include annual reports, semiannual reports and current event reports. Limitations are placed on how much non-accredited investors can invest.

Diasti saw the SEC rule change as the perfect opportunity for Sun Dental Labs, which manufactures and distributes custom dental devices, such as crowns, bridges, partials, dentures, implants and orthodontic devices.

Although based in the United States, Sun Dental Labs also has facilities in the United Kingdom, Sweden, France, the Netherlands, Germany and China.

 “Our goal is to be in the forefront of the movement as dentistry goes digital in the coming decade,” Diasti says. “Right now, 95 percent of dentists use the traditional method for creating an impression of a patient’s teeth when the patient needs a crown or bridge or other dental device.”

Anyone who has gone through such a procedure knows the routine. The patient bites into an uncomfortable gooey substance that Diasti says doesn’t always provide correct results.

“We’ve developed a digital workflow that lets the dentist scan the mouth to get an impression, which will provide a more accurate fit, is more comfortable for the patient and results in a quicker turnaround,” Diasti says.

Sun Dental anticipates that the dental-device market will continue to grow, and the company plans to grow with it. That’s where the sale of equity securities under the new SEC rules comes in.
Sun Dental’s initial goal is to raise $20 million, but the company decided to pursue a Tier 2 offering so it has the option to raise as much as $50 million.

“Our plan is to purchase additional manufacturing equipment and technology, and acquire a dental lab facility in Latin America,” Diasti says.

In addition, the capital raised would be used for such purposes as to pay off a portion of the company’s bank line of credit, make strategic acquisitions and hire additional personnel.
Diasti says the new SEC rules came at an opportune time for Sun Dental.

“In the next 10 years, I believe very few patients will go to a dentist unless that dentist’s office is digital,” Diasti says. “The industry is changing and we plan to be a big part of that.”

About Derek Diasti

Derek Diasti is chief executive officer of Sun Dental Labs (www.sundentallabs.com), which manufactures and distributes custom dental devices, such as crowns, bridges, partials, dentures, implants and orthodontic devices. He also has played a role in other companies, including co-founding Coast Dental, which has more than 180 offices in five states. Diasti has a degree in veterinary medicine from Purdue University.

Sun Dental Holdings, LLC (“Sun Dental”) has filed an offering statement on Form 1-A (including an Offering Circular) under Regulation A with the United States Securities and Exchange Commission (the “Commission”) for the offering to which this release relates. The offering of securities by Sun Dental may only be made by means of the Offering Circular which has been declared qualified by the Commission and  may be accessed through the SEC’s website at www.sec.gov.  A copy of the Offering Circular is also available for review on Sun Dental’s website www.sundentallabs.com and from VRA Partners, 3630 Peachtree Road NE, Suite 1000, Atlanta, GA 30326, by calling (404) 835-1000 or writing VRA Partners.

The United States Securities and Exchange Commission does not pass upon the merits of or give its approval to any securities offered or the terms of the Offering, nor does it pass upon the accuracy or completeness of any Offering circular or other selling literature. These securities are offered pursuant to an exemption from registration with the Commission; however, the Commission has not made an independent determination that the securities offered hereunder are exempt from registration.

Habits can be a trap for people in leadership positions – whether they are in business, politics or another field.

As leaders, they should provide a compelling vision that inspires those around them. Instead, many of them lapse into automatic and mindless thinking. And that can affect every decision they make – and the actions of the people who report to them.

“Too often, we don’t come up with imaginative solutions because we let ourselves be ruled by routine and by preconceived notions,” says Rob-Jan de Jong, a behavioral strategist and author of “Anticipate: The Art of Leading By Looking Ahead” (www.robjandejong.com).

“We think we know ahead of time what will and won’t work, which makes us quick to dismiss ideas that sound too ‘out there.’ The people who answer to you learn the lesson that creative thinking is frowned upon, even if that’s not the lesson you wanted to teach.”

Simply making a New Year’s resolution to have a more open mind in 2016 likely won’t be enough to turn things around. But de Jong says there are behaviors and practices that, through repetition and perseverance, can help leaders and anyone else develop a mindset that’s open to imaginative and better ideas.

• Formulate powerful questions. Generating ideas starts with asking the right questions and the best questions are thought-provoking. They challenge underlying assumptions and invite creativity. “They also give us energy, making us aware of the fact there is something to explore that we hadn’t fully grasped before,” de Jong says. Train yourself to catch poorly designed questions, asked by you or someone else, and reformulate them. Questions that begin with “why,” “what” and “how” are best because they require more thoughtful responses than those that begin with “who,” “when,” “where” and “which.” Especially avoid questions that can be answered with a “yes” or “no.”

• Expand your sphere of influence. “We are strongly influenced, for better or worse, by the small group of people we have direct contact with,” de Jong says. “Since we tend to hang out with people who are fairly similar to ourselves, chances are we are limiting our perspectives.” He recommends making a deliberate effort to encounter people and ideas that are “profoundly different from the usual suspects you hang out with.” Visit a conference of a different profession, hang out with skaters, join an arts club or buy a magazine randomly off the shelf.

• Break your patterns. You can increase your chances of seeing things differently if you deliberately break your normal pattern of working, communicating, thinking, reacting and responding, de Jong says. Take a different route to work. Change where you sit in meetings. If you are normally the first to volunteer, hold back.

• Learn to listen. “We’ve all been taught the importance of being good listeners,” de Jong says. “The problem is most of us struggle to actually do it.” Often when people are “listening,” they really are waiting for the first opportunity to share their story, their opinion or their experience. De Jong suggests training yourself to engage in three pure listening conversations a week. They don’t need to be longer than 15 to 20 minutes, they can be formal or informal, and the other person doesn’t need to know what you’re doing. Vow that you won’t try to take over the conversation no matter how much you want to. “Just keep asking questions and don’t dismiss anything the other person says,” de Jong says. After the conversation, reflect on what you learned. Don’t dismiss any ideas or views that don’t align with yours. “Dare to challenge your own assumptions and reframe your beliefs if need be,” he says.

“Some of these practices may take people outside their comfort zones, and everyone might not be ready to try all of these at once,” de Jong says.  “But if you start to put them into practice, you’ll be able to grow into a more mindful, visionary leader one step at a time.”

About Rob-Jan de Jong

Rob-Jan de Jong, author of “Anticipate: The Art of Leading By Looking Ahead” (www.robjandejong.com), is an international speaker, writer and consultant on strategy and leadership themes. He serves as an expert lecturer at various leading business schools such as the Wharton Business School (USA), Thunderbird School of Global Management (USA), Nyenrode Business University (The Netherlands), and Sabanci Business University (Turkey).

As a behavioral strategist, he speaks, teaches and consults on executive subjects such as visionary leadership, influence, strategic decision-making, and innovation.