Drew Field
Direct Public Offerings
Case StudiesHahnemann Laboratories, Inc.

Hahnemann Laboratories, Inc.

This offering was another significant extension of the DPO experience. For one, it was a test of how small a truly "public" offering could be and still be cost-effective. Secondly, it recognized that the company's customer base was not going to be large enough to support the necessary investment -- other affinity groups would need to be defined and reached.

Michael Quinn, a registered pharmacist, had a lifetime belief in homeopathy. He had started a pharmacy, connected to the well-known Hahnemann Clinic in Berkeley, California. (Many hospitals and clinics had been named after Dr. Hahnemann, who founded homeopathy 200 years ago.) The pharmacy made its own remedies and Michael wanted to begin a pharmaceutical laboratory, in compliance with FDA standards, in order to have nationwide distribution.

The marketing challenge was to find and communicate with people who were true believers in homeopathy. We operated on the assumption that the only investors would be those who had personal experience with homeopathic remedies and believed homeopathy would be a growing part of the health care industry. Michael mailed announcements to the customers of a homeopathic bookseller and a homeopathic software company. Professional organizations members were told of the offering in newsletters, magazines and more mailed announcements.

Regulation A Offering Circulars were mailed as requests came in from these announcements. A total of $467,000 in shares was purchased, by 242 investors. Hahnemann Laboratories held its first shareowners' meeting a few months after the offering was over. The main event was a tour of the new manufacturing laboratory.