What is Regulation A and How Can You Benefit From it?
Regulation A+ is a type of SEC exemption that lets private companies raise up to $75 million per year from accredited and non-accredited investors. It can provide companies with greater investor diversification and give them access to larger amounts of capital.
Read the rest of this article to explore important things about Regulation A+, such as what it involves, its pros and cons, its filing requirements, and more. We’ll also include information about how a lawyer can help you with the process.
What Does Regulation A+ Involve?
Regulation A+ is a registration exemption developed under the Jumpstart Our Business Startups (JOBS) Act. It provides companies with more flexibility to raise money.
There are two tiers involved in Regulation A+ that provide exemption from complete registration.
- Tier 1: This offers up to $20 million of a company’s securities within a 12-month period.
- Tier 2: This provides up to $75 million of a company’s securities within a 12-month period.
What are the Benefits of Regulation A+ Offerings?
There are various pros to consider when choosing Regulation A+ offerings.
Pros
- Disclosure obligations aren’t as extensive as those of traditional IPOs.
- Securities aren’t restricted and can be traded freely.
- General solicitation is permitted.
Cons
- You’ll need to know the limitations of non-accredited investors under Tier 2. For example, non-accredited investors can’t invest more than 10 percent of their net worth or annual income.
- Tier 2 offerings need to be filed annually and semi-annually.
- There are compliance traps to be wary of, such as “bad actor” disqualification rules.
How Do You File a Regulation A+ Offering?
You’ll file your Regulation A+ offering with the SEC (U.S. Securities and Exchange Commission). For this, you’ll need to fill out Form 1-A, which you will submit on the SEC’s EDGAR system.
Once you’ve submitted the form, the SEC will review it and qualify it. You will receive a notice of qualification.
What are the Regulation A+ Reporting Requirements?
The ongoing reporting requirements for Regulation A+ vary depending on whether you’re choosing a Tier 1 or Tier 2 offering.
You don’t have to engage in ongoing reporting for Tier 1 offerings. Once you file an exit report for which you’ll require Form 1-Z after the offering closes, you’re done.
A Form 1-Z requests information that includes the following:
- Information about the issuer
- Offering details, such as the amount of securities that have been sold
- Certification that proves the company can stop the reporting process
As for Tier 2, you have to file annually by submitting a Form 1-K and semi-annually in the form of 1-SA. You will also need to submit current event reports with the use of a Form 1-U if/when changes occur in the business. Examples of changes include if you’re filing for bankruptcy or officers have left the business.
A Form 1-K includes information such as the following:
- Information about a completed offering
- Business description
- Details about key people involved, such as executive officers and directors
- Securities ownership
- Changes to the business
- Detailed financial statements
Some information you’ll have to include in your Form 1-SA include the following:
- The issuer’s legal name and contact details
- Material information that hasn’t been reported previously, such as changes to the company
- Financial statements
Are You Eligible for Reg A+ Offerings?
There are certain criteria you have to meet in order to be eligible for Reg A+ offerings.
- Some companies are excluded. These include business development companies (BDCs) and SEC-registered investment companies.
- Location requirements. You’re eligible if your company is based in the U.S. or Canada.
- “Bad actor” disqualification. If your company has previously experienced legal problems, such as in terms of violations, this could disqualify you.
- Compliance issues. If you haven’t stayed diligent about reporting compliance, you could be ineligible for future offerings.
How Does Regulation A+ Compare to Regulation D?
You might be uncertain about whether to choose Regulation A+ or Regulation D offerings. Although they are both securities exemptions, they have some important differences.
Regulation A+ lets both accredited and non-accredited investors raise money for a company, while public marketing is also allowed. However, it does require high disclosure and ongoing reporting, which can make navigating it more time-consuming than a Regulation D offering.
Regulation D is used for private placements. It has two rules: Rule 506(b) and Rule 506(c).
- Rule 506(b) allows fundraising from accredited investors and up to 35 sophisticated, non-accredited investors.
- Rule 506(c) lets companies engage in general solicitation. Since it doesn’t require SEC qualification or ongoing reporting, Regulation D offerings are usually faster to execute.
Regulation A+ is ideal if you’re focused on obtaining greater investor access, even though more compliance is required. On the other hand, Regulation D is ideal for companies who don’t mind a smaller investor pool but want speed and flexibility in their fundraising.
Should You Hire a Lawyer for Help with Regulation A+ Offerings?
While a Regulation A+ offering might seem straightforward to navigate, it can be complex and filled with various limitations and restrictions. That’s why hiring a lawyer can help you through the process.
An experienced, qualified lawyer can assist you by:
- Drafting all required forms and submitting them by their respective deadlines so that you remain compliant with all SEC requirements.
- Helping you achieve SEC qualification without delays.
- Choosing the best tier (Tier 1 or Tier 2) to suit your requirements.
- Ensuring you don’t make any mistakes when submitting forms.
- Managing all reporting obligations on your behalf so you don’t become ineligible.
- Protecting your interests and minimizing your risks.
- Providing legal advice throughout the process.
Do you need to find a lawyer for a Regulation A+ offering?
Although finding a professional, reputable lawyer can be challenging, especially when you need someone who specializes in securities offerings, the process is easier when you hire a lawyer from ContractsCounsel, an online legal network that connects clients with lawyers who have been vetted on the platform.
Whether you require document reviews or you need assistance with filing your Registration A+ offering, a lawyer will assist you so that you stay legally compliant and maintain the integrity of your business.
Regulation A+: The 2026 "Mini-IPO" Manual
Target Word Count: 1,200 words
Structure: 7 Detailed Sections
1. Introduction: The Crowdfunding Bridge
- The 2026 Context: Reg A+ has matured into a mainstream tool for tech startups and real estate syndicates. It occupies the middle ground between Regulation D (private placements for the wealthy) and a Full IPO (NASDAQ/NYSE).
- The "General Solicitation" Advantage: Unlike most private rounds, you can market a Reg A+ offering across social media, TV, and email, building a brand community while raising cash.
- The Goal: To provide a cost-effective pathway to public capital markets, often as a precursor to an eventual up-listing.
2. Tier 1 vs. Tier 2: Selecting Your Pathway
In 2026, issuers must choose between two distinct tiers based on their capital needs and willingness to undergo audits.
-
Tier 1 (Up to $20 Million):
- Best for localized businesses.
- No SEC Audit: Financials generally don't need to be audited (unless already available).
- The "Blue Sky" Trap: You must register in every state where you sell shares, which can be expensive and slow.
-
Tier 2 (Up to $75 Million):
- The dominant choice for 2026 startups.
- State Preemption: Bypasses state "Blue Sky" laws (federal qualification covers the whole US).
- Audit Mandatory: Requires two years of audited financials and ongoing SEC reporting (Annual Form 1-K, Semi-Annual Form 1-SA).
3. "Testing the Waters": The 2026 Pre-Marketing Strategy
- Gauging Interest: One of the most powerful features of Reg A+ is the ability to "test the waters" before filing a formal offering.
- Non-Binding Indications: You can solicit non-binding indications of interest from the public to see if there is enough demand to justify the $50k–$100k in legal and accounting setup costs.
- 2026 Digital Tools: Using "Reservation Portals" to build an investor waitlist, which can be converted into actual capital once the SEC "qualifies" the offering.
4. The Filing Process: Form 1-A and SEC Qualification
- The Offering Statement (Form 1-A): This is your "Mini-Prospectus." It includes business operations, risk factors, and use of proceeds.
- Confidential Review: First-time issuers can submit a draft Form 1-A for a non-public "Confidential Review" by the SEC staff.
- Qualification Date: You cannot actually sell shares or take money until the SEC issues a "Notice of Qualification." In 2026, this process typically takes 90–120 days.
5. Investor Limits and the "Accredited" Distinction
- Accredited Investors: No limits on how much they can invest.
- Non-Accredited Investors (Tier 2 Only): Retail investors are limited to investing no more than 10% of the greater of their annual income or net worth.
- Self-Certification: In most cases, the issuer can rely on the investor's self-certification of these limits, reducing the administrative burden.
6. Liquidity and Secondary Trading
- Freely Tradable Shares: Unlike Reg D or Reg CF (Crowdfunding), securities issued under Reg A+ are not "restricted." They are technically freely tradable from day one.
- The Trading Venue: To provide actual liquidity, 2026 issuers often list their shares on OTC Markets (OTCQX or OTCQB) or use specialized ATS (Alternative Trading Systems) that handle secondary trading for private companies.
- Secondary Sale Cap: During the first year, "secondary sales" (insiders selling their own shares) are capped at 30% of the total offering.
7. 2026 Costs and Long-Term Compliance
- The "All-In" Cost: Expect to spend $150k–$300k on legal, audit, and marketing before the first dollar comes in.
- Ongoing Reporting: Tier 2 issuers must file annual and semi-annual reports. In 2026, missing these deadlines can lead to a "Bad Actor" disqualification, barring you from future raises.
- Conclusion: Reg A+ is a powerful branding and capital tool, but it requires "Public Company Lite" discipline. If you want a base of 5,000 "brand-ambassador" investors, this is your vehicle.
