Regulation A+: The Mini-IPO That Lets Issuers Raise Up to $75 Million from the Public

For issuers who have outgrown the $5 million ceiling of Regulation Crowdfunding but are not yet ready for a full registered IPO, Regulation A+ occupies a powerful middle ground. Enacted under Title IV of the JOBS Act and significantly expanded by the SEC in 2015 and again in 2020, Reg A+ allows companies to raise substantial capital from the general public — including non-accredited investors — through a process that resembles a scaled-down IPO without the full weight of Securities Act registration.

Tier 1 vs. Tier 2: Choosing the Right Track

Regulation A+ is divided into two tiers with meaningfully different limits and obligations.

Tier 1 allows issuers to raise up to $20 million in a 12-month period. Tier 1 offerings require SEC qualification but are also subject to state securities (Blue Sky) registration in each state where securities are offered. The state-by-state compliance burden makes Tier 1 impractical for most issuers targeting a broad national investor base.

Tier 2 allows issuers to raise up to $75 million in a 12-month period. Tier 2 offerings are preempted from state Blue Sky registration requirements — a significant advantage over Tier 1. In exchange, Tier 2 issuers must provide audited financial statements in their offering circular and comply with ongoing annual (Form 1-K), semi-annual (Form 1-SA), and current event (Form 1-U) reporting obligations after the offering closes. For most issuers, Tier 2 is the preferred track.

Who Can Use Regulation A+

Regulation A+ is available to companies organized in the United States or Canada that are not already reporting companies under the Exchange Act and are not investment companies registered under the Investment Company Act. Blank check companies, issuers of fractional undivided interests in oil or gas rights, and certain other categories are ineligible.

Notably, Special Purpose Acquisition Companies (SPACs) are generally not eligible to use Reg A+ for their initial offering. Issuers that have previously defaulted on Reg A+ reporting obligations are also subject to a one-year cooling-off period before they can conduct a new offering.

The Offering Circular: Form 1-A

Before an issuer can sell securities under Regulation A+, it must file a Form 1-A offering circular with the SEC through EDGAR and obtain SEC qualification. Unlike a Regulation D offering, which requires only a Form D notice filing after the first sale, Reg A+ requires the SEC to review and qualify the offering materials before any sales can occur.

The Form 1-A includes a narrative description of the business, risk factors, use of proceeds, management discussion and analysis, executive compensation, related-party transactions, and financial statements. For Tier 2 offerings, the financial statements must be audited by an independent auditor in accordance with either U.S. GAAP or PCAOB standards.

The SEC review process typically takes 30 to 60 days for an initial filing, with one or more rounds of comments from the SEC staff. Issuers should budget for a 90 to 120-day pre-launch timeline from initial filing to qualification.

Testing the Waters

One of Regulation A+'s most useful features is the ability to test the waters — solicit non-binding indications of interest from potential investors — before filing the Form 1-A with the SEC. This allows issuers to gauge market demand before committing to the full cost of preparing audited financials and a complete offering circular.

Testing-the-waters materials must include specific legends required by SEC rules and cannot be used to accept money or binding commitments. Once the Form 1-A is filed, the issuer may continue testing the waters, but must update its materials to reflect the filed offering circular.

Investor Limits and Accredited Investor Status

Unlike Rule 506(c), Regulation A+ Tier 2 permits sales to non-accredited investors. However, non-accredited investors in a Tier 2 offering are subject to an investment limit: no more than 10% of the greater of annual income or net worth may be invested in all Tier 2 offerings in a 12-month period. Accredited investors are not subject to this limit. Issuers are not required to verify investor status — investors self-certify their eligibility.

Ongoing Reporting Obligations for Tier 2 Issuers

Tier 2 issuers that complete a Regulation A+ offering take on a continuing disclosure regime that, while lighter than full Exchange Act reporting, is more demanding than Regulation D or Regulation Crowdfunding.

The issuer must file an annual report on Form 1-K within 120 days of fiscal year-end, including audited financial statements and a current business description. A semi-annual report on Form 1-SA is due within 90 days of the end of the first six months of the fiscal year. Form 1-U must be filed within four business days of certain material events, including fundamental changes to the business, bankruptcy, changes in accountants, and non-reliance on previously issued financial statements.

These obligations continue until the issuer has fewer than 300 holders of record of the Reg A+ securities, has filed at least one annual report, and either has total assets below $10 million or has completed a registered offering.

Reg A+ vs. Rule 506(c) vs. Reg CF: The Decision Framework

Issuers navigating the exempt offering landscape often ask how these three pathways compare. The right choice depends on offering size, investor composition, timeline, and ongoing compliance tolerance.

Rule 506(c) is the fastest and least burdensome option for issuers who need to raise capital quickly from accredited investors only. There is no SEC review, no offering circular, and no ongoing reporting. The tradeoff is that the investor pool is limited to accredited investors.

Regulation Crowdfunding is best for issuers raising under $5 million who want broad public participation and are comfortable with the Form C disclosure process and the platform-hosted campaign format.

Regulation A+ Tier 2 is the right choice for issuers raising between $5 million and $75 million from the general public, who can absorb the cost of audited financials and the SEC review process, and who want the credibility and visibility that comes with a publicly qualified offering.

Florida Considerations

Florida-based issuers benefit from Tier 2 preemption from state Blue Sky registration. However, Florida still requires issuers to file a notice with the Florida Office of Financial Regulation and pay a filing fee before offering securities to Florida residents in a Tier 2 offering. Florida also imposes anti-fraud provisions that apply regardless of federal preemption, and the OFR has authority to investigate and bring enforcement actions against issuers who make material misstatements in their offering materials.

Counsel for Regulation A+ Issuers

The Law Office of Carl G. Hawkins, PLLC advises issuers on Regulation A+ offerings, including Form 1-A preparation, SEC comment response, testing-the-waters strategy, and post-qualification reporting compliance. If you are considering a Reg A+ offering, contact the firm before engaging an auditor or preparing your offering circular — early legal counsel can significantly reduce the cost and timeline of the qualification process.