Under Regulation A, there are two offering tiers – each with a different limit on maximum dollars raised:
- Tier 1 allows issuers to raise up to $20 million in a 12-month period
- Tier 2 allows issuers to raise up to $75 million in a 12-month period
This big difference between the two, outside of the maximum dollar limit, is that Tier 2 offerings require additional financial audit and reporting requirements in order to receive SEC qualification.
But even for Tier 1 issuers, there are many states in the country that require the same upfront audit as is needed for a Tier 2 so in the majority of cases, that is something that most issuers will need to do anyway.
There is still a difference in post offering reporting requirements though which is something to consider; with Tier 2 being more involved than Tier 1.
For more information on these two tiers, click here to read our blog post: What is the Difference Between Tier 1 and Tier 2 Regulation A Investment Offerings