Part of the Regulation A+ Offerings: The Complete Guide
Reg A+ vs. Reg D: Which Capital Raise Exemption Should Your Company Use?
Reg A+ (typically Tier 2) if you want to raise up to $75M per 12 months from accredited and non-accredited investors with broad online marketing. Use Reg D (506(c) or 506(b)) if you want to raise unlimited capital but only from accredited investors.
The Short Answer
Reg A+ (typically Tier 2) suits companies that want to raise up to $75M per 12 months from accredited and non-accredited investors, with broad online marketing. Reg D (506(c) or 506(b)) suits companies that want to raise unlimited capital but only from accredited investors: 506(c) allows public advertising with accreditation verification, while 506(b) generally limits solicitation to people the company already knows.
This page covers the practical trade-offs between the two: investor eligibility, fundraising caps, marketing rules, SEC filings, typical timelines, audit and reporting requirements, liquidity considerations, and when companies add Reg D alongside Reg A+ to raise more than $75M.
What Reg A+ and Reg D Each Are
These are the short versions. For the full framework, see the pillar guide.
Regulation A+
Regulation A+ is an SEC exemption that lets a company run a public offering to raise capital from the general public, typically using Tier 2A larger Reg A+ offering type, capped at $75M per year, exempt from state-by-state securities registration. to raise up to $75 million in any 12-month period. It's open to startups and established companies, including non-US companies that set up a US or Canadian entity, and it allows public advertising and online fundraising from accredited and non-accredited investors worldwide. Key features include filing Form 1-A with the SEC, providing audited financials (usually two years if the company has been operating that long), and ongoing SEC reporting after qualification. Companies sometimes pursue a NASDAQ, NYSE, or ATS listing later for liquidity.
Regulation D
Regulation D is an SEC exemption used by private companies to raise capital without registering the offering, commonly under Rule 506(b) or 506(c). Rule 506(b) generally prohibits general solicitation (no public marketing) and is typically raised through existing relationships, while Rule 506(c) allows public advertising and online marketing but requires the company to verify accredited investorAn investor who meets SEC income, net worth, or professional-knowledge thresholds that qualify them to participate in unregistered offerings. status through acceptable third-party verification methods. The key limit for both: you can only accept accredited investors, plus up to 35 unaccredited investors under 506(b).
Side-by-Side Comparison
Every row below reflects the SEC's Regulation A and Regulation D rules. Costs and timelines are ranges. Actual figures vary by company complexity, and this comparison isn't a claim that either exemption is categorically better; the right fit depends on your goals.
| Category | Reg A+ Tier 2 | Reg D 506(b) | Reg D 506(c) |
|---|---|---|---|
| Investor access | Accredited and non-accredited investors. The general public can invest. | Primarily accredited investors. Up to 35 non-accredited investors may participate if they meet sophistication requirements and receive required disclosures. | Accredited investors only. |
| Maximum raise | Up to $75 million per 12-month period. | No SEC dollar cap. | No SEC dollar cap. |
| General solicitation | Yes. Public marketing is permitted, subject to applicable offering rules. | No. General solicitation and public advertising are prohibited. | Yes. Public marketing and general solicitation are permitted. |
| SEC filing | Exempt from full registration, but requires an SEC-qualified Form 1-AThe SEC offering circular a company files and gets qualified before it can sell securities under Regulation A+. before sales. | Exempt from full registration. A Form D notice filing is typically required. | Exempt from full registration. A Form D notice filing is typically required. |
| Ongoing reporting | Yes. Ongoing SEC reporting obligations apply. | No ongoing SEC reporting requirement under the exemption. | No ongoing SEC reporting requirement under the exemption. |
| Audit requirements | Audited financial statements are required (generally two years of coverage if the company has operated that long). | No SEC audit requirement under the exemption. | No SEC audit requirement under the exemption. |
| State / blue sky | Tier 2 generally preempts state blue skyState-level securities registration rules. Tier 2 issuers generally skip these once the SEC has qualified the offering. registration. State notice filings and fees may still apply. | Federal preemption generally applies. States may still require notice filings and fees. | Federal preemption generally applies. States may still require notice filings and fees. |
| Typical timeline | SEC qualification often takes about 60 days or longer after filing, depending on comments and complexity. A raise commonly stays active for around 12 months. | Generally faster than Reg A+ once documents are prepared. Setup can take a few weeks. | Similar setup timeline to 506(b), plus time for accredited investor verification. |
| Typical cost range | Varies significantly. An early-stage audit alone often runs $25k to $40k or more, on top of legal, marketing, and ongoing reporting. | Varies. Primary costs are legal work, offering prep, and platform or administration fees. | Varies. Adds public marketing spend and third-party accreditation verification costs. |
| Best suited for | Broad investor access, including non-accredited investors, marketed publicly within an SEC-qualified framework. | Private raises through existing networks and relationships, without public advertising. | Public marketing to accredited investors only, with verification in place. |
Core distinction: Reg A+ Tier 2 gives broader investor access and public marketing but adds SEC qualification, audited financials, and ongoing reporting. Reg D 506(b) is built for private raises without general solicitation. Reg D 506(c) allows public marketing but limits participation to verified accredited investors.
Quick Decision Framework
| Company objective | Potentially better fit |
|---|---|
| Raise from the general public, including non-accredited investors | Reg A+ Tier 2 |
| Run broad digital marketing and investor acquisition campaigns | Reg A+ Tier 2 or Reg D 506(c) |
| Raise privately from existing investor relationships | Reg D 506(b) |
| Raise an unlimited amount under the exemption | Reg D 506(b) or 506(c) |
| Avoid ongoing SEC reporting obligations | Reg D 506(b) or 506(c) |
| Publicly advertise while accepting only accredited investors | Reg D 506(c) |
| Build a broad retail investor and shareholder base | Reg A+ Tier 2 |
See current Reg A+ offerings on our platform.
When to Choose Reg A+ (and When Not To)
Reg A+ isn't right for every company. These are the practical conditions that tend to point one way or the other.
Reg A+ is often a strong fit when
- You want to raise from the general public, accredited and non-accredited investors, not just wealthy accredited investors.
- You need public-facing marketing to succeed. Reg A+ lets you market broadly and build momentum while raising.
- You want to raise up to $75M per 12 months, with the option to run a cost-effective 12-month offering after qualification.
- You'd rather raise smaller checks from many investors than hand control to a few large ones.
- You have a consumer or community story where customers and fans can become investors, which often lowers marketing cost per dollar raised over time.
- You want a realistic path to being "public" without a traditional IPO, with the option to pursue an OTC, NYSE, or Nasdaq path later if it fits.
Reg A+ is often not the best fit when
- Speed matters above everything else. Reg D can launch faster since it doesn't require SEC qualification of an offering circular.
- You don't want ongoing SEC reporting. Tier 2 Reg A+ carries ongoing reporting obligations.
- You can't support the fixed prep work: most companies need audits (two years of audited financials if you've operated that long) plus securities legal work and sustained marketing.
- You're not prepared for sizable ongoing advertising spend. Successful online fundraising usually requires meaningful, sustained ad spend and disciplined optimization, so budget for it upfront.
Timing in practice: SEC qualification is often about 60 days after filing, sometimes as fast as two weeks. A well-run Reg A+ raise commonly takes about 12 months from qualification to being fully funded cost-effectively.
Consider Reg D instead when
- Speed and simplicity matter most. Form D is filed within 30 days after accepting the first investment, with a relatively simple process.
- Accredited-only investors are acceptable, such as angels, family offices, and high-net-worth individuals.
- You want to avoid Reg A+'s audit requirement, which reduces prep time and friction.
- You want more freedom to discuss projections. Under Reg D, the SEC's posture generally assumes accredited investors can evaluate projections with appropriate skepticism.
- You want flexibility in deal terms, since Reg D supports more sophisticated structures (redemption options, warrants, and similar features).
- You're comfortable with accreditation verification. Broad advertising under 506(c) requires verifying accredited status, which can deter some investors.
- You're okay with a potentially lower valuation. Reg D raises often price lower than a well-run Reg A+ raise, since the investor base is narrower.
One useful hybrid: if you're aiming above $75M per year, some companies run Reg A+ alongside a parallel Reg D raise, since Reg A+ is capped at $75M per 12 months while Reg D has no dollar cap.
How we help: we coordinate an integrated process, introducing and managing the auditors first, then the securities attorney, then the marketing agency, and guiding you on how to use each effectively. We also help you avoid common, expensive pitfalls, especially around marketing efficiency and unnecessary intermediaries.
Ready to explore Reg A+ for your company? Talk to an MSC strategist.
FAQ
Frequently Asked Questions
Can a company do both Reg A+ and Reg D?
Yes. The SEC allows a company to run a Reg D offering alongside a Reg A+ offering. In practice, companies often use Reg A+ to reach accredited and non-accredited investors (Tier 2, up to $75M per 12 months) while running Reg D in parallel to raise additional capital from accredited investors, since Reg D has no dollar cap, sometimes with different terms because Reg D investors often require more attractive economics. Legal counsel needs to structure the two offerings carefully to avoid integration and compliance problems.
Is Reg A+ more expensive than Reg D?
Generally yes, both up front and on an ongoing basis. Reg A+ requires audited financials (typically two years for Tier 2, if the company has operated that long), a larger SEC filing and qualification process (Form 1-A) than a Reg D filing, and ongoing SEC reporting after the raise (annual audited financials, semiannual updates, and current-event updates). Marketing spend is usually the largest expense in a successful Reg A+ raise, since reaching large numbers of investors takes sustained advertising and optimization.
Reg D typically costs less: no SEC qualification wait (you file a Form D notice rather than waiting for approval), no audit requirement in most cases, and no ongoing SEC reporting. Marketing spend still varies with your investor access, but the regulatory overhead is usually much lighter than Reg A+.
Does Reg D have a raise limit?
No dollar cap applies to Reg D, including 506(b) and 506(c). The practical constraint to watch is investor count: crossing 2,000 investors can, depending on circumstances and company size, trigger Section 12(g) public-company-style reporting obligations. There are legitimate ways to plan around this, and it's worth addressing early.
Citations
- U.S. Securities and Exchange Commission, Regulation A, 17 CFR §230.251–230.263.
- U.S. Securities and Exchange Commission, Regulation D, 17 CFR §230.500–230.508.
- U.S. Securities and Exchange Commission, Form D Notice of Exempt Offering of Securities, 17 CFR §230.503.
- U.S. Securities and Exchange Commission, Exchange Act Section 12(g) Registration Thresholds, 15 U.S.C. §78l(g).
Manhattan Street Capital is not a law firm, valuation service, underwriter, broker-dealer, or Title III crowdfunding portal, and does not engage in any activities requiring such registration. Manhattan Street Capital does not provide investment advice and does not structure transactions. Do not interpret any commentary from Manhattan Street Capital staff as a replacement for advice from qualified service providers in these professions. When Rod Turner provides commentary, it is based on his observations of what works and what does not from a marketing perspective in online offerings; he does not tell readers what to do, only what is most likely to be cost-effectively marketed online. All decisions about the terms of any offering are made by the companies making those offerings.