crowdfunding explained

Regulation A; Tier 2 Equity Crowdfunding Explained

October 7, 2016

Regulation A, Regulation A+, Tier 1 Equity Crowdfunding, Tier 2 Equity Crowdfunding are among the many terms, concepts and topics that require explanation for those seeking to raise money via crowdfund campaigns. Towards helping entrepreneurs, service providers and others in the business of raising capital, RaiseMoney.com provides not only a global search directory aka yellow pages for best crowdfund platforms, but insight and resources profiling rules associated with the various components of the new SEC Regulation A+ laws for equity crowdfund campaigns, as of November 2015

Reg A+ Tier 1

  • Raise up to $20M in a 12 month period
  • No more than $6M can be offered for sale from affiliate security holders
  • Affiliates are also precluded from selling more than 30% of internal shares in the Reg A+ offering
  • Requires Form 1-A registration statement with the SEC
  • Non-affiliates can sell their shares after one year under SEC Rule 144
  • Company must engage in the services of an SEC registered Transfer Agent
  • Available to C-corps, S-corps and Limited Liability Companies (including REITs) with organized businesses in the United States and Canada
  • Requires PCAOB or GAAP audited financial statements for the previous two years
  • Requires adherence to state BlueSky laws
  • Allows solicitation to and investment from both accredited and non-accredited investors¬†

Reg A+ Tier 2

  • Raise up to $50M in a 12 month period
  • No more than $12M can be offered for sale from affiliate security holders
  • Affiliates are also precluded from selling more than 30% of internal shares in the Reg A+ offering
  • Requires Form 1-A registration statement with the SEC
  • Non-affiliates can sell their shares after one year under SEC Rule 144
  • Company must engage in the services of an SEC registered Transfer Agent
  • Available to C-corps, S-corps and Limited Liability Companies (including REITs) with organized businesses in the United States and Canada
  • Subject to Tier 2 on-going annual and semi-annual reporting requirements
  • Requires PCAOB or GAAP audited financial statements for the previous two years
  • Preempts necessity of adhering to state BlueSky laws
  • Allows solicitation to and investment from both accredited and non-accredited investors¬†

By preempting most state blue sky laws, Tier 2 Regulation A+ allows issuers to generally solicit and sell securities to both accredited and non-accredited investors via nearly any medium including email, social media, telemarketing and broadcast television.

What is the expected cost of a Regulation A+ Offering? Click here for the answer.

Tier 2 Equity Crowdfunding