You are here

What companies can use Regulation A+ to raise capital?

Primary tabs

What companies can use Regulation A+ to raise capital?

Any U.S. or Canadian company in good standing can use Regulation A+ funding to raise capital.  Reg A+ best suits successful companies that want to raise between $2million and $50million* per year.  Typically mid stage companies with a proven track record will work best.  Smaller offerings become uneconomic because of the legal and auditing fees, which we estimate will be approx $75k per company (and could be a lot more depending on which service providers you select, and the complexity of your business). Plus the cost of reporting results to the SEC twice per year (for Tier 2 offerings) and dealing with many individual shareholders.  Companies that are considering making a reverse merger (buying a public shell company) may find that Reg A+ is a far simpler and lower risk way to raise sizable amounts of growth capital through the sale of equity.

There are no reporting requirements for a Tier 1 offering, so ongoing costs are lower. See the FAQ entry on Tier 1 and Tier 2.

*For businesses that lend themselves to segmenting their market by geographic regions, it is possible to make multiple offerings for one parent entity by establishing one subsidiary for each region. For example, let's say a company is planning to lend its capital across the USA. A company can establish say six regional subsidiaries that are responsible for a clearly defined geography of the US and raise capital for each region's entity using a dedicated Reg A+ for each. In this example, the maximum per year would be 6x50 = $300 million per year.