What is Reg A+?

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Regulation A+ (Reg A+) is a set of rules and regulations put in place by the Securities and Exchange Commission (SEC) that allows small and medium-sized companies to raise funds from a large number of investors through a mini-IPO process. Reg A+ is an update to the existing Regulation A, which was adopted under the JOBS Act.

Reg A+ allows companies to raise up to $75 million in a 12-month period from both accredited and non-accredited investors, and it allows the securities to be sold to the public, which differs from Regulation Crowdfunding (Reg CF) which has a cap of $5 million in a 12-month period.

The process of Reg A+ is similar to a traditional IPO, but it is less costly and less burdensome for companies, with fewer disclosure requirements and ongoing reporting obligations, but it still requires the companies to file an offering statement with the SEC, and the SEC will review the statement to ensure compliance with the rules and regulations.

Reg A+ is seen as a way for smaller companies to access the public markets, by providing an alternative to traditional IPOs and Reg D, which are typically only available to larger, more established companies. Reg A+ also allows companies to test the waters and gauge investor interest before committing to a full-scale IPO.

In summary, Reg A+ is a new regulation that allows smaller companies to raise capital from a large number of investors through a mini-IPO process, by complying with certain rules and regulations set by the SEC. It allows companies to raise more capital than Reg CF and it has fewer disclosure requirements and ongoing reporting obligations than a traditional IPO.