Reg-A+ Tier 1 vs Tier 2: Limits, State Review, Audit & Reporting Compared

Reg-A+ has two tiers: Tier 1 permits raising up to $20 million in a 12-month period and remains subject to state "blue sky" review, while Tier 2 permits up to $75 million, preempts state registration, and requires audited financials plus ongoing SEC reporting. The tier an issuer selects determines its fundraising ceiling, state-filing burden, audit obligation, investor limits, and post-qualification reporting — so the choice shapes both the compliance budget and the marketing runway.

Regulation A (commonly "Reg-A+" after the JOBS Act Title IV expansion) lets private companies conduct an SEC-qualified public offering to both accredited and non-accredited investors. Both tiers require filing Form 1-A and receiving SEC qualification before any sales close, both permit general solicitation, and both allow "testing the waters" to gauge demand before filing. The differences sit in the details below.

Reg-A+ Tier 1 vs Tier 2 at a glance

Figures reflect the Regulation A framework as amended; issuers should confirm current thresholds with counsel, as SEC rules are periodically revised.

Tier 1: lower ceiling, state review, lighter federal reporting

Tier 1 permits issuers to offer up to $20 million in a rolling 12-month window, of which no more than $6 million may come from selling security holders (existing shareholders cashing out). Its defining feature is that Tier 1 securities are not federally preempted from state registration. That means an issuer typically must qualify the offering in each state where it intends to sell — a process that varies by jurisdiction.

To reduce that friction, NASAA (the North American Securities Administrators Association) operates a coordinated review program that lets Tier 1 issuers file once for multi-state review rather than negotiating each state separately. Still, state-by-state qualification adds time and legal cost that Tier 2 issuers avoid.

The trade-off is lighter federal reporting. Tier 1 issuers generally do not need audited financial statements in Form 1-A, and after the raise they file only a final exit report (Form 1-Z) rather than ongoing periodic reports. For a smaller, geographically concentrated raise, that lighter reporting load can offset the state-filing burden.

When issuers typically consider Tier 1

• The target raise is well under $20 million.
• Investors are concentrated in a small number of states, limiting blue-sky filings.
• The issuer wants to avoid the recurring cost of audited financials and ongoing SEC reports.

Tier 2: higher ceiling, blue-sky preemption, heavier reporting

Tier 2 permits raising up to $75 million in a 12-month period, with up to $22.5 million attributable to selling security holders. Its signature advantage is federal preemption: Tier 2 securities are "covered securities" under Section 18 of the Securities Act, so states cannot require separate registration or qualification. States retain the right to require notice filings, collect fees, and enforce their anti-fraud statutes, but the issuer runs a single federally governed offering rather than a patchwork of state qualifications.

That preemption is why most issuers running nationwide, marketing-heavy Reg-A+ campaigns choose Tier 2 — general solicitation across all 50 states is operationally cleaner when no state can gate the sale. For a deeper look at how preemption differs across exemptions, see our breakdown of state blue-sky filings under Reg-CF, Reg-D, and Reg-A.

Tier 2 carries a heavier compliance load in exchange:

1. Audited financials. Form 1-A must include financial statements audited by an independent accountant.
2. Investment limits for non-accredited investors. Individual non-accredited investors generally may invest no more than 10% of the greater of their annual income or net worth. Accredited investors are not subject to this cap.
3. Ongoing reporting. After qualification, Tier 2 issuers file annual reports (Form 1-K), semiannual reports (Form 1-SA), current event reports (Form 1-U), and a final exit report (Form 1-Z).

When issuers typically consider Tier 2

• The target raise exceeds $20 million, or the issuer wants headroom up to $75 million.
• The campaign is national and marketed broadly, making state-by-state qualification impractical.
• The issuer can absorb the cost of an audit and ongoing periodic reporting.

The state-review question is usually the deciding factor

For most issuers, the practical decision comes down to one question: will the offering be marketed nationally? A broad, digital-first Reg-A+ campaign — paid social, email, and content driving retail investors to an investor portal — touches every state at once. Under Tier 1, that would trigger qualification obligations across many jurisdictions; under Tier 2, preemption removes that layer entirely. This is why the Reg-A+ raises that lean hardest on marketing almost always run as Tier 2.

Conversely, an issuer raising a modest amount from investors clustered in one or two states may find Tier 1's lighter federal reporting more economical than paying for an audit and years of periodic filings. There is no universally correct tier — the answer depends on raise size, investor geography, and reporting appetite, and issuers should model the total cost of each path with qualified securities counsel.

What both tiers share

• Form 1-A and SEC qualification. Both require filing Form 1-A on EDGAR and receiving SEC qualification before closing sales.
• Open to non-accredited investors. Unlike Reg-D 506(c), both Reg-A+ tiers admit the general public.
• Testing the waters. Both let issuers solicit non-binding indications of interest before filing — the subject of our guide to Reg-A+ Testing the Waters.
• General solicitation. Both permit public advertising of the offering, which is what makes Reg-A+ a marketing-driven exemption.
• Eligibility limits. Both are available to US and Canadian companies that are not SEC-reporting companies, blank-check companies, or investment companies, and neither is available to issuers subject to "bad actor" disqualification.

Cost and marketing implications

Because Tier 2 requires audited financials and ongoing reports, its baseline compliance cost is higher — but it removes the per-state qualification expense and unlocks nationwide solicitation, which is where marketing budget actually produces investors. For a full itemization of legal, audit, and marketing line items across a Reg-A+ raise, see our Reg-A+ total cost breakdown. Whichever tier an issuer selects, the offering still has to be found by investors, and general solicitation only works when paired with a funnel that converts attention into committed capital.

Growth Turbine has provided marketing support across more than $490M in aggregate issuer-reported totals and 200+ campaigns supported spanning Reg-CF, Reg-D 506(c), Reg-A+, and tokenized securities offerings across 23+ crowdfunding platforms and 25+ industries. That vantage point informs how we structure investor-acquisition funnels for Tier 2 campaigns marketed nationally.

Frequently asked questions

What is the maximum you can raise under Reg-A+?

Tier 1 permits up to $20 million in a 12-month period; Tier 2 permits up to $75 million. Selling security holders are separately capped within each tier.

Does Reg-A+ Tier 2 require audited financial statements?

Yes. Tier 2 requires audited financials in Form 1-A and ongoing periodic reports. Tier 1 generally does not require audited financials and has no ongoing periodic reporting beyond a final exit report.

Can Reg-A+ issuers advertise the offering?

Yes. Both tiers permit general solicitation and testing the waters, which is why Reg-A+ is marketed publicly to accredited and non-accredited investors alike.

Do states regulate Reg-A+ offerings?

Tier 1 offerings are subject to state qualification (blue-sky review). Tier 2 offerings are "covered securities" preempted from state registration, though states may still require notice filings and enforce anti-fraud rules. Consult counsel to determine your obligations.

Choosing and marketing your Reg-A+ tier

Selecting a tier is a legal and financial decision best made with qualified securities counsel; executing the raise once qualified is a marketing problem. If you are planning a Reg-A+ offering — particularly a Tier 2 campaign marketed nationally — our Reg-A+ equity crowdfunding marketing agency builds the investor-acquisition funnel that turns general solicitation into committed capital, and you can review the platforms we work across. Contact us to map an acquisition plan to your offering.

Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute legal, financial, or investment advice. Always consult with qualified legal counsel and financial advisors before launching a capital raise.