Tier 1 vs Tier 2: Choosing the Right Regulation A+ Path for Your Raise
Regulation A+ splits into two tiers with materially different compliance loads, and the choice between them shapes how — and where — an issuer can market a raise to the general public.
Tier 1: lower ceiling, more state review
Tier 1 permits raises of up to $20 million per 12-month period, but it does not preempt state blue-sky registration — issuers must clear coordinated review in every state where they plan to sell. For a raise concentrated in a handful of states, that can be manageable; for a national campaign, it becomes a significant bottleneck.
Tier 2: higher ceiling, federal preemption
Tier 2 raises the ceiling to $75 million per 12-month period and preempts state-level securities registration entirely, which is why most issuers running a national Regulation A+ campaign choose it. The trade-off is real: Tier 2 requires audited financial statements and ongoing reporting — annual Form 1-K, semiannual Form 1-SA, and current Form 1-U filings.
How to decide
The practical decision usually comes down to two questions: how much are you raising, and are you willing to commit to an audit and ongoing public reporting in exchange for skipping state-by-state registration? Issuers with a smaller, geographically concentrated raise and a strong aversion to audit costs sometimes stay in Tier 1; nearly everyone else moves to Tier 2.
Practical takeaway
Reg A+ is sometimes called a "mini-IPO" for a reason — Tier 2, in particular, brings public-company-style reporting obligations into a private capital raise. Model the ongoing compliance cost before committing to the ceiling.
This article is provided for general informational and educational purposes only and does not constitute legal, financial, tax, or investment advice. Nothing here is an offer to sell or a solicitation to buy any security. Consult qualified securities counsel before relying on any exemption or filing deadline discussed above.