Regulation A+ Offerings

Regulation A+ offerings (“Reg A+”) are viewed as an alternative to traditional initial public offerings (“IPO”) for micro- and small-cap companies. The Securities and Exchange Commission (“SEC”) designed Regulation A, and as amended and updated in recent years, Reg A+, as a less onerous path for smaller companies to reach the public capital markets. Reg A+ offerings resemble traditional IPOs, but with scaled back disclosure requirements using Form 1-A. Reg A+ offerings are broken into two tiers based on the amount that can be raised in any 12-month period: Tier 1, for offerings up to $20 million, and Tier 2, for offerings up to $75 million. Tier 1 offerings must comply with state-level blue sky qualifications, while state law is preempted in Tier 2 offerings.

Companies undertaking a Reg A+ offering can engage an investment bank to serve as a placement agent or underwriter to facilitate investment in the offering or they can sell their own securities. Shares issued in a Reg A+ offering are not restricted. Because Reg A+ offerings follow the basic outlines of a traditional IPO, these offerings can take up to six months or more, depending on the SEC’s review and the company’s preparedness for public reporting.


  • Scaled disclosure requirements – The disclosure required for Reg A+ offerings is not as extensive as for a traditional IPO. For example, Tier 1 Reg A+ offerings are not required to include audited financial statements.
  • Semi-annual periods for financial reporting – Once qualified, Reg A+ issuers are only required to report their financial results every six months instead of quarterly.
  • Securities not restricted – Shares issued in Reg A+ offerings are not subject to the restrictive legends required for shares purchased in a private offering.
  • Increase retail ownership – Reg A+ offerings typically attract retail investors as opposed to institutional investors and can be a good opportunity to grow a company’s stockholder base.
  • Now available to most companies – Most U.S. and Canada-based companies can use Reg A+ to raise funds, including public and private companies, except for investment companies, blank check companies, and a company disqualified under the “bad actor” rules. 


  • Must begin publicly reporting – Reg A+ issuers must file annual, semiannual, and current reports, similar to traditional Exchange Act reports. While these reports are not as extensive as Exchange Act reports, the Reg A+ issuer will incur additional operating expenses to prepare these reports regardless of how much capital is raised in its Reg A+ offering.
  • Tier 1 offering does not preempt state law – Reg A+ issuers using Tier 1 for their offerings must register or qualify the offering with each state securities commission in which they wish to sell their shares before shares can be sold in that state. This process can be expensive and time-consuming.
  • Could trigger Exchange Act reporting – A Reg A+ issuer will become subject to reporting under Exchange Act Section 12(g) if it gains over a certain number of shareholders or annual revenues.
  • Potential NYSE or Nasdaq roadblocks – National securities exchanges have historically been skeptical of companies that have raised funds through Reg A+ because of their limited ability to meet quantitative and qualitative requirements of the exchanges. 

Before structuring a Reg A+ offering, a company should consider:

  • What is the major driver for accessing the public capital markets?
    • If the company’s major goal in accessing the public capital markets is to increase liquidity in its shares or attract institutional investors, Reg A+ may not be the right path because of the difficulty in listing on a national securities exchange concurrent with or after the offering.
    • Reg A+ offerings seem to be most successful in certain industries, such as real estate.
  • How quickly does my business need this capital?
    • Keep in mind that even after an offering is qualified, funds may not be raised immediately. If the company is seeking capital over a longer time horizon, Reg A+ can be a good choice.
    • If the company is looking for a near-term influx of capital, a private offering under Regulation D may be a better fit.
  • Should I consider a Reg A+ offering or an IPO?
    • While the timeline for a Reg A+ offering is slightly shorter than an IPO, it still takes several months to execute, which is much longer than a private placement.
    • Reg A+ offerings may be a better choice for companies looking to sell their own securities or real estate investment trusts that do not plan to list their shares on an exchange in the near-term.
    • A traditional IPO may be better for companies that seek an exchange listing for their shares and the support of industry professionals who can advise on navigating the offering process.

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