Regulation A+
Quick Definition
An SEC exemption that allows smaller companies to raise up to $75 million from the general public with reduced registration requirements.
Key Takeaways
- Allows companies to raise up to $75 million from the general public
- Non-accredited investors can participate, unlike most Reg D offerings
- Tier 1: up to $20 million with state review; Tier 2: up to $75 million with SEC qualification
- Often called a "mini-IPO" due to lighter requirements than a full S-1
- Popular with crowdfunding platforms and consumer-facing brands
What Is Regulation A+?
Regulation A+ (updated under Title IV of the JOBS Act in 2015) is an SEC exemption that allows companies to offer and sell securities to the general public — including non-accredited investors — without the full burden of a traditional IPO registration. It provides two tiers: Tier 1 permits offerings up to $20 million in a 12-month period with state-level review, while Tier 2 permits offerings up to $75 million with SEC qualification and ongoing reporting requirements but preemption of state securities registration. Tier 2 issuers must file annual, semiannual, and current event reports with the SEC. Often called a "mini-IPO," Regulation A+ has become popular with real estate crowdfunding platforms, consumer brands seeking community investment, and companies that want public capital without the costs and complexity of a full S-1 registration.
Regulation A+ Example
- 1A real estate crowdfunding platform used Regulation A+ Tier 2 to raise $50 million from thousands of retail investors who each contributed as little as $500.
- 2A craft brewery raised $5 million through a Regulation A+ Tier 1 offering, allowing its loyal customers to become shareholders.
Related Terms
Regulation D
SEC rules that provide exemptions from registration requirements, allowing companies to raise capital through private placements.
SEC (Securities and Exchange Commission)
The primary U.S. federal agency responsible for regulating securities markets, protecting investors, and enforcing federal securities laws.
Prospectus
A formal legal document filed with the SEC that provides detailed information about an investment offering to potential investors.
Accredited Investor
An individual or entity that meets SEC-defined financial thresholds, qualifying them to invest in certain unregistered securities offerings.
FDIC
Independent federal agency that insures bank deposits up to $250,000 per depositor, per institution, and supervises financial institutions for safety and soundness.
Insider Trading
The illegal practice of trading securities based on material, non-public information obtained through a position of trust or confidence.
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