What is Reg A+ and why is it used for raising money for your business?

Under "What's Reg A+", we explained what is Reg A+ and we also provided information regarding the history of selling shares and finding investors for your business through legal options under the S.E.C regulations (see Legal Investing).

Now let's look at why businesses and companies choose to use Reg A+ as a vehicle to raise money for their business, below.

Why USE Reg A+ to raise funds For Your Business?

So the answer to the question regarding "Why Reg A+", simply is: it is much easier, more flexible, quicker and dramatically improves the funding prospects for your company, without being tied down and controlled by Venture Capital firms, or spending $100,000s of Dollars just to do a funding to raise a few million Dollars. In fact, Reg A+ is much more cost-effective than standard S1 IPO (the ones you usually hear about on the news).

This funding vehicle (method) allowed through S.E.C. regulations makes it substantially easier and more cost-effective to raise capital for a business. Once, you qualify and adhere to the set regulations, you can advertise directly to the public (which is usually unheard of with other funding methods such as Regulation D, or Reg D). You can offer your stocks on an exchange, or you can retain the control of your business since the stocks/shares offered are considered liquid by the S.E.C. amd there is no lockup period unless you impose a lockup for your company, and raise funds but not go completely onto an exchange for trading.

Hence why this type of funding vehicle is called "Direct IPO", without the use of marketmakers, broker listings, and underwriters who often charge an arm and leg.

Reg A+ is also called a Direct Public Offering. Which means investors can sell their shares under the S.E.C. rules and regulations. This offers liqudity for company directors, affiliates shareholders, and investors.

How can I raise money through Direct IPO Reg A+?

This is the best part of Direct IPO Offering under Reg A+ regulation/exemption:

- You can advertise your company's stock offering and raise capital globally.

This is HUGE. An incredible benefit for a company that wishes to raise capital.

How much can i raise for my business?

You can raise up to $20 million in a 12-month period undert Tier 1 offering and under Tier 2, for offerings of up to $75 million in a 12-month period. For offerings of up to $20 million, companies can elect to proceed under the requirements for either Tier 1 or Tier 2.

Tier 1
  • Can advertise publically to raise capital
  • You can raise up to $20 million
  • No need to have audited financial report * (standard financial report is sufficient)
  • Must statisfy/register with each state when you obtain an investor
    • *Called Blue Sky law, and the state MAY require audit of financial report
  • No limit on investment amount (ideally sophisticared investor)
Tier 2
  • Can advertise publically to raise capital
  • You can raise up to $75 million
  • Must have audited financial report
  • Anyone can invest globally
    • Non-accredited investors are limited to 10% of income/net worth per year
    • No limits on accredited investors
  • No state registration required (Blue Sky law doesn't apply)


  1. 10-days overall planning and preparations
  2. 15-30-days audit of existing company books
  3. 60-days (can vary) marketing, content development, prospecting
    • 10-days offering/prospectus preparation
    • Concurrently develop ad/creative content
    • Offering pitch, video, PR, graphics
    • Social media accounts, advertising
  4. Prospecting, setting appointments, and presentations to potential investors
  5. SEC Qualify filing and the company go live to investors

With good planning, team work, focus, we have done an entire Reg A funding from beginning to the end in as little as 3 months.

  1. Audit depends on size of company, about $15K for a small company
  2. Legal fees depend on who much work can be done internally (as much as $10K)
  3. Marketing can be the most expensive (as much as $50K or more)
    • $50K for funds as much as $2M-$5M
    • $100K for funds as much as $8M-20M
  4. S.E.C. and State Securities filing (as much as $5K)

    In our experience cost may vary, sometimes drastially, based on the team conducting the offering. A smart frugal team knows how to get an audit done, do marketing of the offering, and keep costs down to a minimum. It's best to get an experienced consultant.