Quick Summary
Reg A+ and Reg D are two SEC exemptions that let private companies raise capital without completing a full IPO registration. Reg A+ permits companies to raise up to $75 million from both accredited and non-accredited investors, although it involves SEC review and ongoing reporting requirements. Reg D permits unlimited fundraising from accredited investors with minimal SEC disclosure and no continuing reporting obligations. Understanding reg a+ vs. reg d comes down to investor access, fundraising goals, disclosure requirements, and the company’s long-term capital strategy. Mina Mar Group advises companies on both exemption frameworks.
Navigating the landscape of capital markets means understanding the regulatory frameworks that govern how private companies raise money from investors. Two of the most commonly used exemptions from full SEC registration are Regulation A+ and Regulation D.
Both allow companies to raise capital without going through a traditional IPO, but they differ substantially in who they can reach, how much they can raise, and what ongoing obligations they create.
Choosing between Reg A+ vs. Reg D is a decision that should be grounded in your company’s growth stage, investor strategy, and long-term goals.
What Is Regulation A+?
Regulation A+, often referred to as a mini-IPO, was modernized through the JOBS Act of 2012 and later updated by the SEC. It enables companies to raise up to $75 million within a 12-month period from both accredited and non-accredited investors.
The SEC’s Regulation A+ resource page outlines the full requirements, including the two tiers of the regulation.
Regulation A+ includes two distinct tiers. Tier 1 permits companies to raise up to $20 million during a 12-month period but requires state securities registration, also known as Blue Sky compliance, in addition to federal review.
Tier 2 increases the fundraising limit to $75 million and preempts state Blue Sky requirements. This makes it a more practical option for companies seeking larger raises across multiple states.
Tier 2 offerings require audited financial statements, a Form 1-A offering circular filed with the SEC, and ongoing reporting through annual reports on Form 1-K and semi-annual reports on Form 1-SA.
What Is Regulation D?
Regulation D is the most widely used private placement exemption in the United States. It allows companies to raise capital from investors without SEC registration, subject to conditions on investor eligibility and the manner of solicitation. The SEC’s Regulation D overview describes the key rules in detail.
The two most commonly used exemptions under Regulation D are Rule 506(b) and Rule 506(c). Rule 506(b) permits companies to raise an unlimited amount from up to 35 sophisticated non-accredited investors and any number of accredited investors. General solicitation and advertising are not permitted under this exemption.
Rule 506(c) also permits unlimited fundraising, but participation is limited exclusively to verified accredited investors. Companies may advertise and broadly solicit investors as long as they take reasonable steps to verify accredited investor status.
Key Differences: Reg A+ vs. Reg D
Who Can Invest
Investor eligibility is one of the most important distinctions. Reg A+ Tier 2 permits companies to raise capital from both accredited and non-accredited investors, subject to investment limits tied to an investor’s income and net worth.
Regulation D under Rule 506(b) permits participation from a limited number of sophisticated non-accredited investors, while Rule 506(c) limits participation exclusively to verified accredited investors.
Companies seeking access to retail investors generally need to pursue Reg A+. A broader investor base can benefit consumer-focused businesses, recognizable brands, and companies with products that appeal to individual investors.
Amount That Can Be Raised
Reg A+ Tier 2 limits fundraising to $75 million during a 12-month period. Regulation D does not impose a statutory fundraising cap. This allows companies to raise unlimited capital as long as they satisfy the applicable investor eligibility requirements.
SEC Review and Disclosure
Reg A+ requires filing a Form 1-A offering circular with the SEC, which is subject to SEC review and comment, similar in some respects to the IPO registration process. This creates a more robust disclosure document and subjects the offering to regulatory scrutiny, but the process is less demanding than a full IPO.
Regulation D under Rule 506 requires no advance SEC review. The Form D notice is filed after the first sale. Companies must provide non-accredited investors with specified disclosure documents, but the overall disclosure burden is significantly lower than Reg A+.
Advertising and General Solicitation
Under Reg A+, companies can advertise their offerings broadly and solicit investment from the general public, including through social media, press releases, and online platforms. This makes Reg A+ well suited to crowdfunding-style capital raises that leverage public awareness.
Under Reg D Rule 506(b), general solicitation is prohibited; investments must come through existing relationships or referrals. Rule 506(c) permits general solicitation but restricts investment to verified accredited investors.
Ongoing Reporting
Reg A+ Tier 2 companies have ongoing SEC reporting obligations, including annual reports on Form 1-K and semi-annual reports on Form 1-SA. These obligations are less demanding than those of a full public company but more substantial than those of a Reg D issuer.
Reg D issuers have no ongoing SEC reporting requirements arising solely from the Reg D exemption.
When Reg A+ Is the Better Choice
Reg A+ is well suited to companies that want to raise capital from a broad base of investors, including retail participants, and are willing to accept greater disclosure obligations in exchange for that access.
It is particularly useful for consumer-facing businesses, real estate companies, and companies that want to build a public market for their shares as a stepping stone toward a full NASDAQ or NYSE listing.
Mina Mar Group’s capital markets advisory services include guidance on structuring and executing Reg A+ offerings.
Can You Use Both?
Some companies use Reg D for an initial raise and then pursue Reg A+ for a subsequent, broader offering once the business has demonstrated traction. These are not mutually exclusive paths; the right sequencing depends on the company’s capital needs and investor relations strategy at each stage.
Mina Mar Group has worked with companies across both exemption frameworks and can help you evaluate which approach aligns with your current stage and long-term capital strategy. The firm’s capital markets team can also assess whether a full IPO or SPAC route makes more sense as your business scales.
Not sure whether Reg A+ or Reg D fits your capital strategy? Request a consultation with Mina Mar Group.
FAQs
What is the main advantage of Reg A+ over Reg D?
Reg A+ allows companies to raise capital from both accredited and non-accredited investors, while also permitting public advertising, giving businesses access to a much broader investor base.
Is there a cap on how much can be raised under Regulation D?
No, Regulation D has no statutory fundraising cap. Companies can raise unlimited capital, but investor eligibility rules apply, and a Form D filing is required after the first sale.
How long does a Reg A+ offering take?
A Reg A+ offering typically takes 4 to 8 months. SEC review usually begins within 2 to 4 months, with timing depending on offering complexity and response speed.
