Reg A vs Reg CF: investor FAQ

They are two SEC exemptions, expanded by the 2012 JOBS Act, that let private companies sell securities to the general public — not just wealthy, accredited investors — without a full IPO registration. Both require the company to file disclosure documents with the SEC that anyone can read on EDGAR.

Yes. Both Reg CF and Reg A Tier 2 are open to non-accredited investors 18 or older, subject to investment limits described below. Accredited investors face no Reg CF limit.

The offerings are small, the companies are private, and there are no trading commissions or investment-banking fees to support research. That's the gap RegAMagazine covers.

Up to $5 million in a 12-month period.

Only online, through a single SEC-registered intermediary — either a funding portal or a broker-dealer — that is a member of FINRA. Highlander Crowdfunding, which hosts the offerings profiled on this site, is a registered funding portal.

Non-accredited investors are limited across all Reg CF offerings in any 12-month period:

• If either your annual income or net worth is below $124,000: the greater of $2,500 or 5% of the greater of your income or net worth.
• If both are $124,000 or more: 10% of the greater of your income or net worth, up to $124,000.

Net worth excludes your primary residence. Accredited investors have no Reg CF limit.

The disclosure document a company files with the SEC to launch a Reg CF offering. It covers the business, management, use of proceeds, offering terms, financial statements and risks. Companies file Form C-U progress updates and, after a successful raise, an annual report on Form C-AR.

Generally yes, up to 48 hours before the offering deadline. If the company makes material changes to the offering, investors must reconfirm or their commitments are cancelled. Check the platform's specific rules.

Reg CF offerings set a minimum target. If it isn't reached by the deadline, the offering doesn't close and investors' funds are returned from escrow.

Not for one year, except to the issuer, an accredited investor, family members, or in a registered offering. Even after a year, there is usually no market to sell them.

• Tier 1: up to $20 million in 12 months.
• Tier 2: up to $75 million in 12 months.

A Form 1-A offering statement, including an offering circular, which the SEC must “qualify” before sales begin. Tier 2 requires audited financial statements and ongoing reports: an annual Form 1-K, semiannual Form 1-SA, and current reports on Form 1-U.

Tier 1 has no federal investor limit but requires state registration. In Tier 2, a non-accredited individual may invest no more than 10% of the greater of annual income or net worth per offering, unless the securities will be listed on a national exchange.

Reg A securities are not “restricted” the way Reg CF shares are, but most have no trading market. Some Reg A companies later list on an exchange or trade over the counter; many never do.

It's often called that because companies can sell to the public with lighter disclosure than a full IPO. It is not the same as a listing — an offering being qualified does not mean shares will ever trade.

Search the company name on SEC EDGAR. Reg CF filings appear as Form C; Reg A filings as Form 1-A and 253G2.

• Security type and your rights (voting, non-voting, SAFE, note).
• Valuation compared with revenue and comparable companies.
• Use of proceeds and how long the money will last.
• Financial statements — reviewed or audited?
• Prior rounds: did the price go up or down?
• Management background and related-party transactions.
• Bad-actor disclosures.

Some issuers offer extra shares for investing early or in larger amounts, or product perks. Bonus shares lower your effective price; perks have no investment value. Neither should drive the decision.