What Is Regulation A+? Definition, How It Works and Examples

Regulation A is an old SEC rule for small public offerings, first adopted in 1936. In 2012, Congress told the SEC to expand it in Title IV of the JOBS Act. The SEC’s new rules took effect on June 19, 2015, and created two tiers. The expanded version is often called Regulation A+, and the SEC staff calls these deals mini-IPOs.

The key difference from a private placement is who may buy. Under Regulation D, most buyers must be accredited investors, people who pass the SEC’s income or wealth tests. Regulation A+ is a public offering, so the company may advertise and sell to anyone. In exchange, it files a disclosure document that the SEC staff reviews.

Two later changes matter. From January 31, 2019, companies that already report to the SEC may use it too. From March 15, 2021, the Tier 2 limit rose from $50M to $75M. The company must be organized and based in the US or Canada. Investment funds, shell companies with no real business plan and issuers with bad actors cannot use it.

Regulation A+ works like a lighter IPO. The steps run in this order.

1. 01
   Testing the watersThe company may ask the public about interest before or after it files, with set legends on its materials. About 37% of qualified offerings did this.
2. 02
   FilingThe company files an offering statement on Form 1-A electronically with the SEC. Its main part is the offering circular, the document investors read.
3. 03
   QualificationSEC staff review the filing and may comment. Sales can start only after the SEC qualifies the offering statement, which is its form of clearance.
4. 04
   SellingThe company sells shares, often on a best-efforts basis. That means no bank promises to buy what is left unsold. About half of offerings used a broker or other intermediary.
5. 05
   ReportingA Tier 2 company files ongoing reports. A Tier 1 company files only an exit report within 30 days after the offering ends.

The two tiers trade size for paperwork. Tier 1 allows less money and lighter accounts, but the company must also register with each state where it sells. Tier 2 allows more money and skips state registration, in exchange for audited accounts and regular reports.

Tier 2 dominates. From 2015 to 2024, it accounted for 93% of the money sought and 81% of qualified offerings.

A consumer company wants to raise $40M from its customers. The company, the investors and every number here are illustrative. $40M is above the Tier 1 limit, so it uses Tier 2. Its founders also want to sell some shares. In a first Regulation A offering, existing holders may sell at most 30% of the total, so up to $12M here.

Ana’s cap uses the greater of her two figures. Her net worth of $150,000 beats her $90,000 income, so 10% of $150,000 sets the limit. The company may rely on her own statement of these figures unless it knows the statement is untrue. After the deal, it files a Form 1-K each year and a Form 1-SA each half-year, which Ana can read on the SEC’s site.

Key risks come from the kind of company that uses Regulation A+. An SEC staff study of qualified offerings from June 2015 to December 2024 shows the pattern.

• No market to sell intoFor 75% of qualified offerings, no trading market for the shares existed when the offering took place. Only about 2% came with an exchange listing.
• Young, unprofitable companiesThe median issuer was two years old. About one in eight had a net profit, and just over a third had any revenue.
• Raises fall shortQualified offerings sought $28.3B, and companies reported raising $9.4B. The median reported raise was $2.3M.
• Best-efforts sellingWith no bank committed to buy, a company can end up with less money than its plan assumed.
• Lighter checks in Tier 1Tier 1 accounts need no audit, and no ongoing reports follow the offering.

Legally, the shares are easier to resell than most private shares. Rule 144 does not list Regulation A shares among restricted securities. In practice, a buyer is the problem. Without an exchange listing, finding someone to buy can take years, and the price is uncertain. Our guide to pre-IPO risks covers the wider list.

Before you buy, read the offering circular. It explains the business, the risks, the share rights and how the money will be used. Compare it with what a full IPO requires on Form S-1. A Regulation A+ circular is shorter, and Tier 1 accounts are unaudited.

Size your stake with the 10% cap as a ceiling. The rule sets the most you may put in, and a smaller amount is often wiser, given how few of these shares can be sold. Check also which class of shares you get and what rights it carries. Our guide to private company stock explains how share classes differ.

Common Mistakes

• Reading qualification as approvalThe SEC qualifies the filing. It does not judge whether the investment is good.
• Confusing legal resale with liquidityThe shares are not restricted, but most have no market.
• Treating the 10% cap as a targetIt is only the legal maximum for one year of Tier 2 purchases.
• Ignoring the tierTier 1 brings no audit and no ongoing reports. Check which tier the offering uses.
• Expecting an IPO nextFew issuers list on an exchange. Plan for a long hold or a loss.

Regulation A+

The expanded Regulation A, in effect since June 19, 2015, that lets smaller companies sell securities to the public in two tiers.

Tier 1

The smaller Regulation A tier: up to $20M a year, with state registration and no audit requirement.

Tier 2

The larger tier: up to $75M a year, with audited accounts, ongoing reports and no state registration.

Form 1-A

The offering statement a company files with the SEC for a Regulation A offering.

Offering circular

The part of Form 1-A that investors read, describing the business, risks and terms.

Qualification

The SEC’s clearance of a Regulation A offering statement, after which sales can begin.

Testing the waters

Asking the public about interest in an offering before or after filing, with required legends.

Best efforts

A sale where no bank commits to buy unsold shares.

Accredited investor

A person or entity that passes the SEC’s income, wealth or license tests.

Figures were last checked on October 21, 2026. The rules are United States federal rules. Tier 1 offerings also follow state rules, so check the current text before you act.