Regulation A

Regulation A is the SEC framework allowing companies to make public-like securities offerings up to $75 million annually with less burden than a full IPO. Often called Reg A+ following the 2015 expansion under the JOBS Act, it is structured in two tiers (Tier 1 up to $20M with state-level coordination, Tier 2 up to $75M with federal preemption of state law). It is sometimes called a "mini-IPO" because shares can be freely traded post-offering and the company can market the offering publicly. It is the regulatory layer between Reg CF crowdfunding (smaller, less complex) and full IPO (larger, much more complex), occupying a middle space that few companies actually use but that fits specific situations well.

The two tiers:

• Tier 1: up to $20 million annually. Requires state-level "Blue Sky" review in addition to SEC review (state-by-state coordination is administratively heavy). Less commonly used because of state complexity.
• Tier 2: up to $75 million annually. SEC review only (federal preemption of state law on most matters). Requires audited financials, ongoing reporting requirements (similar to public companies but lighter), and the offering can be marketed publicly. The most common Reg A+ structure.

The qualification process: file Form 1-A with the SEC, which the SEC reviews and "qualifies" before the offering can launch (similar process to S-1 IPO review but typically faster and less expensive). Offering can be marketed publicly during the qualification process via a "testing the waters" mechanism. Once qualified, shares can be sold to both accredited and non-accredited investors via online platforms or directly. Companies famously using Reg A+: StartEngine (the platform itself raised via Reg A+), Knightscope, BrewDog, Elio Motors, Boxed, Acquired Sales Corp, plus dozens of consumer brands and cannabis companies that couldn't access traditional capital markets. The 2020s reality: Reg A+ has not become the popular alternative to IPO that some predicted; the complexity is still significant, the cost ($500K-$2M+ in legal, audit, and platform fees), and the qualification timeline (3-12 months) deters many companies that could otherwise use it.

Ryan's Take

Reg A+ is the SEC offering that sits in a useful middle ground and gets used less than it should. The right use cases: consumer brands with broad audiences, companies in regulated industries with limited traditional capital access (cannabis, certain healthcare), and companies that want public-like liquidity without the full IPO cost. The wrong use case: founders thinking Reg A+ is a fast cheap IPO; the actual cost ($500K-$2M+) and timeline (3-12 months) make it more expensive than many founders realize. Compare carefully to direct listing, traditional IPO, and staying private with secondary sales.

What founders get wrong: Treating Reg A+ as a cheap IPO. The total cost (legal, audit, platform fees, ongoing reporting) often runs $500K-$2M+, and the qualification timeline is months not weeks. For most companies that could do a traditional IPO, the costs net out roughly similar; Reg A+ wins when the company specifically wants the smaller-investor base or has audience-driven marketing dynamics that fit the offering.

Related: [Regulation D] · [Regulation CF] · [Equity Crowdfunding] · [JOBS Act]

FAQ

What is Regulation A? The SEC framework (often called Reg A+ after the 2015 expansion under the JOBS Act) that allows companies to make public-like securities offerings up to $75 million annually with less regulatory burden than a full IPO. Structured in two tiers: Tier 1 (up to $20M) and Tier 2 (up to $75M). Sometimes called a "mini-IPO."

What's the difference between Reg A Tier 1 and Tier 2? Tier 1: up to $20M annually, requires state-level "Blue Sky" review alongside SEC review. Tier 2: up to $75M annually with SEC review only (federal preemption of state law), requires audited financials and ongoing reporting, allows public marketing of the offering. Tier 2 is the more commonly used structure.

How much does a Reg A+ offering cost? Typically $500K-$2M+ in total costs (SEC legal fees, audit costs, platform fees if using one, marketing). Plus ongoing reporting requirements similar to public companies but lighter. Qualification timeline: 3-12 months from filing to launch.