Reg D & Compliance
Regulation A+ vs. Reg D: Should Your Raise Go Public?
Regulation A+ is sometimes called the 'mini-IPO': an SEC exemption that lets a company raise up to $75 million from the general public — accredited and non-accredited investors alike — without a full stock-exchange listing. For a real estate sponsor, it's the exemption that opens a raise to anyone, with marketing freedom Reg D can't match. The catch is cost and process: Reg A+ requires SEC qualification, audited financials, and ongoing reporting that make it a serious undertaking, not a default.
By One Million Media4 min read
This guide explains Regulation A+ for sponsors: how its two tiers work, how it compares to Reg D 506(c), and when going semi-public is worth the cost. It's educational, not legal advice.
What is Regulation A+?
Regulation A+ (an expansion of the older Regulation A under the JOBS Act) lets companies offer and sell securities to the public under a streamlined process that's lighter than a full IPO but heavier than a private placement. Unlike Reg D, it's open to non-accredited investors, and the securities are generally freely tradable — which is why it's described as a 'mini-IPO.' The trade-off is that the offering must be qualified by the SEC before you can sell.
It comes in two tiers, and the differences matter a great deal for which sponsors it suits.
Tier 1 vs. Tier 2
| Tier 1 | Tier 2 | |
|---|---|---|
| Raise cap (12 months) | Up to $20M | Up to $75M |
| State blue-sky review | Required (each state) | Preempted — big advantage |
| Audited financials | Not required | Required |
| Ongoing reporting | Lighter | Annual, semiannual, current reports |
| Investor limits | None federally | Non-accredited investors capped by income/net worth |
Tier 2 is the one most sponsors mean by 'Reg A+.' Its preemption of state blue-sky review is a major practical benefit — a Tier 1 raise across many states means clearing each state's review, which can be slow and expensive. Tier 2's price is audited financials and ongoing SEC reporting, closer to being a small public company.
Regulation A+ vs. Reg D 506(c)
For a sponsor weighing how to raise publicly, the comparison that matters most is Reg A+ versus Reg D 506(c):
| Reg D 506(c) | Reg A+ (Tier 2) | |
|---|---|---|
| Who can invest | Accredited only (verified) | Anyone (non-accredited capped) |
| Raise cap | Unlimited | Up to $75M / 12 months |
| SEC process | Form D notice (no review) | Offering must be SEC-qualified |
| Audited financials | Generally not required | Required |
| Public marketing | Yes (must verify accreditation) | Yes (broadest) |
| Cost / time to launch | Lower / faster | Higher / slower (months) |
| Ongoing reporting | Minimal | Significant |
506(c) gets you public marketing and unlimited raise size with low overhead — but only from verified accredited investors. Reg A+ gets you everyone, including non-accredited investors and freely tradable securities — but at the cost of SEC qualification, audits, and ongoing reporting. The right choice hinges on whether reaching non-accredited investors is worth the substantial added cost and time.
When Reg A+ makes sense
Reg A+ is a specialized tool that fits specific situations:
- You want to raise from a large base of non-accredited investors — for example, a brand or community you can convert into investors.
- The raise is large enough (often eight figures) to justify the legal, audit, and filing cost.
- Marketing reach to the broad public, and liquidity/tradability of the securities, is strategically valuable.
- You're building a recurring capital-raising machine, not doing a one-off deal, so the infrastructure pays off over time.
For the typical sponsor raising $2M–$10M from accredited investors, Reg D 506(c) is almost always the more efficient path — public marketing without the SEC qualification, audits, and reporting burden. Treat Reg A+ as a deliberate strategic choice for going semi-public, made with experienced securities counsel, not a default exemption.
Frequently asked questions
What is Regulation A+?
Regulation A+ is an SEC exemption, sometimes called a 'mini-IPO,' that lets a company raise up to $75 million from the general public — including non-accredited investors — under a streamlined process lighter than a full IPO. The offering must be qualified by the SEC before sale, and the securities are generally freely tradable, which distinguishes it from a private Reg D placement.
What's the difference between Tier 1 and Tier 2 of Reg A+?
Tier 1 allows up to $20M per year but requires state blue-sky review in each state and no audited financials. Tier 2 allows up to $75M, preempts state review (a major advantage), but requires audited financials and ongoing SEC reporting, and caps how much non-accredited investors can invest. Most sponsors using Reg A+ use Tier 2.
How is Regulation A+ different from Reg D 506(c)?
Reg D 506(c) lets you raise unlimited capital with public marketing but only from verified accredited investors, with minimal overhead. Reg A+ lets you raise from anyone, including non-accredited investors, with freely tradable securities — but requires SEC qualification, audited financials, and ongoing reporting. 506(c) is faster and cheaper; Reg A+ reaches a broader investor base at a much higher cost.
Can non-accredited investors invest in a Reg A+ offering?
Yes — that's a defining feature. Regulation A+ is open to the general public, including non-accredited investors, though in a Tier 2 offering non-accredited investors are limited in how much they can invest based on their income or net worth. This is the main contrast with Reg D 506, which is limited to (and for 506(c) requires verified) accredited investors.
When should a real estate sponsor use Reg A+?
Reg A+ fits when you want to raise from a large base of non-accredited investors, the raise is big enough (often eight figures) to justify the legal, audit, and reporting cost, and broad public marketing or security liquidity is strategically valuable. For typical accredited-investor raises of a few million, Reg D 506(c) is usually far more efficient. The decision should be made with securities counsel.
Keep reading
This article is for educational purposes only and is not legal, investment, tax, or securities advice. Securities offerings are regulated; always work with your securities attorney to structure and run your offering. One Million Media is a marketing and lead-generation provider — not a broker-dealer, investment adviser, or law firm.
