How Regulation A Turned Into A Powerhouse

Regulation A has been a securities sales exemption for a long time but was rarely used by issuers for raising capital. How then did Regulation A become the premier exemption to file under for raising capital from the general public? 

The "old" Regulation A program required the issuer to prepare and file a Form 1-A filing (essentially an S-1 filing) for review and SEC qualification. Once SEC qualified - an issuer then had to have the offering qualified in every State they intended to offer the securities.  This was a very cumbersome process (and is essentially how Tier 1 still operates) and is a key reason why very few issuers were filing securities offerings under Reg A.

Enter the JOBS Act of 2012 and the subsequent rules changes to Reg A in March 2015 that resulted in "Regulation A+" and the creation of Tier 2 Regulation A.  Under Tier 2 a company can raise up to $75m in a year, generally solicit the public, raise capital from accredited and non-accredited investors, sell freely trading securities, accommodate selling shareholder sales, and are able to immediately sell securities in all 50 states once SEC qualified. Tier 2 dramatically changed the landscape for executing an exempt offering as Tier 2 mimics the investor acquisition capabilities of a fully public offering.

The amount of capital raised under Reg A+ in the last five years has exploded and it is expected to continue on that growth curve in the future as more issuers learn about and subsequently file under Regulation A+ to raise capital.

Interested in executing a Regulation A+ offering for your company?  Call the experts at Regulation D Resources today: (720) 586-8610.