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What is the best situation to use Tier 1 in Reg A+ offerings?

When is Tier 1 the clearcut best way to do your Regulation A+ offering?

These are the ideal situations where Tier 1 is best:

1) All your investors are local and in one State, and the State is easy to get your Blue Sky filing approved. See the detailed list of States and how they work.

2) Your company is a bank that is exempt from State Blue Sky filing requirements.

3) All your investors will be from OUTSIDE the USA. Then you have no need to file for Blue Sky exemption with any US States.  This is close to ideal.

4) A maximum raise of $20 mill is sufficient. (Tier 2 starts at zero and goes up to $50 mill*).

 

*For businesses that can segment their market by geographic regions, it is possible to make multiple simultaneous offerings for one entity.

For example, let's say a company is planning to buy a series of businesses and add value to them for future sale at a profit - Private Equity is a good example. A company can establish say six regions of the US and raise capital for each region simultaneously using a dedicated Reg A+ for each region. In this example, the maximum per year would be 6x50 = $300 million per year.

 

SEE RELATED FAQs:

I want to use Tier 1. How can I make it work well?

What are Tier 1 and Tier 2 Regulation A+ offerings?