Regulation A has exploded in use by issuers seeking a sophisticated offering that mimics “public offering” investor acquisition capabilities without the cost and complexity of an S1 based IPO. Currently the Tier 2 Regulation A annual limit is $75m. It has been proposed to potentially increase this to $150m per year. Here are two reasons we support an increase in the Regulation A Tier 2 limit:

1.  There are many issuers that are quickly reaching the current $75m annual limit that would greatly benefit from the additional available capital. Many of these issuers are having to rely on Regulation D private placement offerings in the interim integration period to continue raising capital while they await the ability to raise more funds under Regulation A.

2.  Regulation A provides for a more sophisticated offering (compared to a Regulation D Offering) and the SEC is able to review and qualify the offering prior to execution. We would assume the SEC would like to incentivize use of Regulation A since it provides the SEC an opportunity to review and qualify the offering and related filing and legal agreements. 

We are hopeful with so many success stories emerging from the use of Regulation A that we will see the increase to $150m annually. In our opinion it will enhance use of the program and help companies continue to build capital and expand.

Interested in raising capital for your company? Call us today to discuss!  (720) 586-8610