SEC Regulation A-Plus For Equity Crowdfund

Below is a brief outline of some of the 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.