Raise $50 Million with the new Regulation A+

What is extraordinary about the new Reg A+ is that unaccredited investors are allowed to invest
and that you can use general solicitation with no restrictions.
Regulation A+ (Title IV of the JOBS Act) preempts state regulation for offerings between $20
million and $50 million (Tier II). For raises between $5 million and $20 million (tier I), offerings
will be reviewed by both state and Federal regulators.
Of course, states will keep complete jurisdiction with all issues relating to fraud on all offerings
of whatever size and type. This is significant in that most investor complaints are initially made
to state regulators.
Issuers can raise up to a maximum of $50 million or $20 million in any given 12 month period.
These offerings are not restricted to accredited investors; anybody can invest. However, investors
using Tier II offerings are allowed to invest only up to 10% of net worth or 10% of net income,
for each offering in which he or she invests in any 12 month period. For Tier I offerings, there
are no such limits.
Unlike Rule 506(c), investors will be permitted to certify their income or net worth themselves.
This is very important because otherwise the issuer must find a qualified third-party to give
him or her a verification letter. You can find a model verification letter at
www.privateplacementadvisors.com.
Just as amazing as the no accredited investor requirement is the fact there are no restrictions on
solicitations at all! Issuers can, and already have, solicited money on craigslist (for a REIT); TV
and social media can be used; you can hire spokesmen.
But this still is not going to be a cakewalk. You still need a real deal. Offering documents must
be approved by the SEC (and state regulators if the offering is for $20 million or less) prior to
commencing sales.
Private Placement Advisors LLC will be drafting and filing disclosure and other offering
documentation for clients in need of these state and Federal approvals.
For Tier II offerings, the issuer will need to submit audited financial statements for two years.
For Tier I offerings, financials not need to be audited.
Uniquely and interestingly, the SEC is allowing new Reg A issuers to test the waters before
committing the money and time required to prepare the full scale offering documents package
and execute on it. During these test runs, potential investors can express interest but cannot
invest.
Issuers of Tier II offerings will have to file annual disclosure filings, semi-annual reports, current
reports, and audited financials. This requirement can be discontinued after the 12 months if the

total number of shareholders is then under 300. There are no continuing requirements for issuers
of Tier I offerings.
The old Regulation A (now Tier I) was almost never used before because the securities had to be
registered in every state where the offering was made. The new regulations will make for a
Federal-state coordination process that is more practicable and functional (and less expensive).
The securities will be freely transferable and unrestricted and this will lead to secondary trading,
perhaps on a massive level, within a couple of years.
Author Douglas Slain
Private Placement Advisors are equity and debt crowdfunding experts. We
charge less than law firms and most other service providers for the same
advice and services. We help curate the multiple crowdfunding and peer to
peer platforms and web sites and help draft pitch decks for distribution.