Reg A Tier 1 vs Tier 2 in 2026: A Complete Guide

What Is the Difference Between Tier 1 and Tier 2 of Regulation A+?

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. Tier 1 caps offerings at $20 million and requires state-by-state Blue Sky registration, while Tier 2 caps offerings at $75 million, requires audited financials and ongoing SEC reporting, but is exempt from state registration. While both tiers have benefits and drawbacks, tier 2 generally provides the greatest flexibility and opportunity for companies looking to raise capital.‍

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A common misconception we see is that tier 1 is more flexible than tier 2. This is an assumption that many issuers arrive at after learning that Tier 1 does not require 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 2 the more attractive option; comprising 89.1% of all Reg A+ raises (read about a real Tier 2 raise that hit the $75M ceiling) Issuers also assume Tier 2 only makes sense once you’re raising close to the $75M ceiling, but there’s no minimum: a company raising $2M can still file under Tier 2 to get the Blue Sky exemption and broader marketing latitude. The tier you choose determines which rules apply to your raise, not how much you’re raising.

• Offering Limit: Under tier 2 you can raise up to $75 M in a 12 month period - significantly higher than the tier 1 limit of $20 M per 12 month period.
• Blue Sky Exemption: Under tier 2, issuers are not subject to Blue Sky regulations and can raise from ALL states. Under tier 1, issuers are subject to Blue Sky regulations that require registration with each individual state from which investments will be accepted. This state-by-state registration process requires the payment of in-state fees for each state registered in as well as a state-by-state review of all offering documents.
• Ongoing Reporting: Tier 1 holds the advantage here, under which issuers are generally not subject to ongoing reporting obligations. There are financial obligations under Tier 2 that require issuers to file financial reports with the SEC.

What a Tier 1 State Filing Actually Costs

The Blue Sky Exemption point above is more than a compliance footnote, it's a real cost driver. Tier 1 issuers must register in every state where they plan to accept investments, and each state sets its own filing fee.

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Those fees vary widely. Massachusetts charges a minimum of $300, scaling up to $1,500 for larger offerings. New York layers several separate filing fees depending on offering size and security type, with one category alone reaching a $30,000 maximum on offerings of $15M or more. Some states add ongoing costs on top of the initial filing: Vermont, for example, charges a $2,000 notice filing fee plus a $1,500 annual renewal.

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Multiply that across a handful of states and the state filing fees alone can rival or exceed what a Tier 2 issuer pays for SEC review. And the fee is only part of it. Tier 1 issuers also need to budget for state-by-state review of their offering documents and, in most cases, legal counsel to coordinate the multi-state process, costs Tier 2 issuers largely avoid, since Tier 2 is exempt from state registration and merit review, though smaller state notice filing fees can still apply in some states.

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This is the practical reason most issuers weigh Tier 2's higher upfront compliance bar (audited financials, ongoing reporting) against Tier 1's state-by-state costs, and often land on Tier 2 even when they don't need the full $75M ceiling.

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Note: state filing fees change without notice and some states charge multiple stacking fees depending on offering size and security type. Confirm current figures with your compliance team or a Blue Sky filing service, such as Colonial Stock Transfer, before publishing.

Marketing and Advertising Under Each Tier

Both tiers let you market and advertise your raise to the public, general solicitation is one of the core advantages of Reg A+ over regulations like Reg D. But the rules governing that marketing aren't identical.

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Under Tier 1, your advertising is still filtered through each state's Blue Sky requirements. Some states impose their own restrictions on solicitation and promotional materials, so what you can say and how you can say it may vary depending on where your investors are located.

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Under Tier 2, federal preemption removes that layer. Issuers have more consistent latitude to run broader promotional campaigns, general solicitation included, without checking state-by-state advertising rules, as long as they stay within SEC disclosure requirements.

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In practice, this is another reason Tier 2 suits issuers running a national marketing push, while Tier 1 fits issuers who are comfortable keeping their outreach concentrated in one or two states.

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Which Tier Is Right for My Raise?

The right tier depends less on how much you’re raising and more on where your investors are and how broadly you plan to market.

• A local or regional business, raising from a concentrated investor base. If you’re realistically only going to raise from investors in one or two states, and you don’t plan to advertise nationally, Tier 1 can work. You’ll register in those states directly and skip the audited financials and ongoing SEC reporting Tier 2 requires. 
• A company running a national marketing campaign. If you plan to advertise broadly and accept investment from anywhere in the country, state-by-state Blue Sky registration under Tier 1 becomes a real bottleneck, both in cost and time. Tier 2’s federal preemption lets you raise from any state without separate approvals. Read about RYSE’s $11.2M raise using our Marketing Services. 
• A growth-stage company planning to raise again, or eventually list on an exchange. Tier 2’s audited financials and ongoing reporting are more work upfront, but they build a compliance and disclosure history that makes a follow-on raise, or a future listing, more straightforward. Issuers who expect to keep raising capital over time tend to be better served starting with Tier 2. Read about how Monogram took the path from startup to Nasdaq. 

Most issuers, even those who don't need the full $75M ceiling, end up choosing Tier 2 for the flexibility to raise from any investor, in any location, without state-by-state registration. Learn more about companies that have raised successfully on our case studies page.

Frequently Asked Questions

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Can a company switch from Tier 1 to Tier 2?
Yes. An issuer can switch tiers by amending its offering statement, most commonly before the SEC qualifies the offering. Switching after qualification is possible but means meeting the new tier's disclosure and reporting requirements going forward.

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Do Tier 2 issuers need audited financials from day one?
Yes. Audited financial statements must be included in the offering statement itself, before the SEC qualifies a Tier 2 offering, not phased in later. Tier 1 only requires reviewed, not audited, financials.

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What is Form 1-Z?
Form 1-Z is the exit report an issuer files with the SEC when a Reg A offering is completed or terminated. It's the only ongoing SEC filing required of Tier 1 issuers; Tier 2 issuers file it when they exit their ongoing reporting obligations.

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Is there a minimum raise required for Tier 2?
No. There's no minimum offering size for Tier 2. A company raising $2M can file under Tier 2 to get the Blue Sky exemption and broader marketing latitude, the same as a company raising $75M.

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What ongoing reports do Tier 2 issuers file after qualification?
Form 1-K annually, Form 1-SA semi-annually, and Form 1-U whenever a material event occurs. Tier 1 issuers file none of these.

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Do Tier 1 issuers still need SEC approval, or just state approval?
Both. Tier 1 issuers must get their offering statement qualified by the SEC and separately register in every state where they'll accept investments. Blue Sky compliance is additional to SEC review, not a substitute for it. 

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Ready to start structuring your Reg A+ raise? DealMaker's Reg A+ platform handles the offering statement, investor onboarding, and ongoing reporting for both Tier 1 and Tier 2 issuers. Talk to our team about which tier fits your raise.