Regulation A+ (Reg A+) is an incredibly powerful method for raising capital, however, in order to get the most out of your raise, it is crucial to select the correct tier for you. While both tiers have benefits and drawbacks, tier II generally provides the greatest flexibility and opportunity for companies looking to raise capital.
A common misconception we see is that tier I is more flexible than tier II. This is an assumption that many issuers arrive at after learning that tier I does not require a broker-dealer or ongoing reporting. While the ability to forego a broker-dealer and ongoing reporting does simplify the process somewhat, there are several key differences that ultimately make tier II the more attractive option— comprising 73% of all Reg A+ raises.
Planning to raise from only one or two states? In this case, tier I may be a good option for you. However, this is not typically the case as the goal of most issuers is to make their raise available to as many investors as possible. Remember, the advantage of Reg A+ is that it allows you to raise and advertise to a much broader pool of investors— non-accredited and accredited. Issuers looking to leverage the full benefits of Reg A+ opt for tier II— raising from any investor, in any location, up to the full $75 M.