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September 26, 2024
Regulation A+ (Reg A) has emerged as a powerful tool for businesses seeking capital, providing a streamlined and cost-effective way for companies to raise from both accredited and non-accredited investors. Since its inception in 2012, Reg A has democratized access to capital, enabling companies to raise significant funds through digital public offerings.
This comprehensive guide will walk you through the intricacies of Reg A: its regulations, its advantages over other offering types, and a strategic roadmap for launching a successful offering. We'll also highlight how DealMaker, a leading Reg A platform, can streamline your capital journey and empower you to reach a wider investor audience.
Regulation A+, or Reg A, is a securities exemption that allows eligible companies to raise up to $75 million per 12-month period through a public offering. Unlike traditional IPOs, which are often reserved for larger companies, Reg A offers a more accessible and cost-effective path for smaller and mid-sized businesses to raise substantial capital.
Regulation A+ offers two distinct tiers for companies looking to raise capital. Companies offering securities under Regulation A must adhere to specific requirements and limitations when raising funds. Reg A is divided into two tiers:
Regulation A+ offers two distinct tiers for companies looking to raise capital, each with its own set of requirements and benefits.
Choosing the right tier depends on your company’s capital needs and willingness to comply with the associated regulatory requirements. Both tiers provide a flexible and efficient way to raise capital, making Regulation A a versatile tool for businesses of various sizes.
Reg A offers several compelling benefits for businesses seeking capital:
Reg A is suitable for a variety of businesses, including:
To be eligible for Reg A, your company must meet certain requirements, such as being a U.S. or Canadian company and providing audited financial statements.
Additionally, under the Investment Company Act of 1940, there are limitations and exemptions for issuers that are not required to be registered. This act excludes certain types of issuers from being classified as investment companies.
To be eligible for a Regulation A+ offering, companies must meet specific criteria and prepare thoroughly. Here are the key requirements:
Additionally, companies must adhere to ongoing reporting requirements, including filing annual and quarterly reports with the SEC. These steps ensure transparency and build investor confidence, paving the way for a successful Regulation A offering.
The Reg A process typically involves the following steps:
Complying with Reg A regulations is crucial for the success and legality of your offering. Here are some key regulatory considerations:
DealMaker’s platform simplifies regulatory compliance with 1:1 expert guidance throughout your raise.
To maximize your chances of success with a Reg A offering, consider these best practices:
After completing a Regulation A+ offering, companies must continue to meet specific reporting obligations to maintain transparency and accountability. These include:
In addition to these reporting requirements, companies must comply with investment limitations, which restrict the amount non-accredited investors can invest in a Regulation A+ offering. Maintaining an existing trading market for your securities is also crucial, as it allows investors to buy and sell securities on a national securities exchange, providing liquidity and fostering investor confidence.
By adhering to these post-offering reporting requirements, companies can ensure ongoing compliance with the SEC and maintain a transparent relationship with their investors, ultimately supporting long-term success and growth.
DealMaker is the leading platform for Reg A offerings, empowering founders and operators to raise capital efficiently and on their own terms. Our platform’s hub of tools and services support you throughout the entire Reg A process.
Here's how DealMaker can help you:
Regulation A+ empowers businesses to raise up to $75 million per year from their customers, followers, and fans—a transformative opportunity that can drive growth, increase brand awareness, and create meaningful 1:1 relationships between companies and their communities. Reg A securities, often referred to as the 'Mini IPO,' offer the advantage of raising capital with a less intensive qualification process than a traditional IPO, promoting liquidity for investors and reducing risk through shorter investment timelines.
By understanding the regulations, following best practices, and choosing a trusted platform like DealMaker to power your offering, you can unlock the full potential of Reg A and propel your business to new heights.
Don’t miss out on this opportunity to tap into a wider investor pool and fuel your company’s growth. Contact DealMaker today to learn more about how we can support your Reg A journey and help you raise the capital you need to succeed.