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

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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*).

The acceptance of cryptocurrency payments presents the potential for companies to raise capital from investors worldwide which may allow them to successfully raise capital from non-US investors.This opens up the possibility for companies to use Tier 1 for its simplicity, and only accept investors from some US States that have simple/efficient Blue Sky filing programs. Tier 1 doesn't require an audit prior to the Reg A+ SEC filing, the post-offering reporting requirements are significantly reduced (no audit and no 6 monthly profit and revenue reporting) and the investors are not limited as to how much they can invest.

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

 

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?