Reg CF vs. Reg D vs. Reg A for company fundraising

Choose an exemption around the investors you need

Reg CF, Regulation D, and Regulation A are different ways to offer securities without registering the offering under the Securities Act. They are not rankings of company quality. Each has requirements for the issuer, the offering, or the investors.

Start with who you want to reach, how much capital you need, how you plan to communicate, and the disclosure work your company can support. Under Regulation D, distinguish Rule 506(b) from Rule 506(c). Their rules for public solicitation and investor participation differ substantially.

The comparison below is an orientation. Eligibility, state requirements, disqualification provisions, and other conditions still need review for the proposed transaction.

Offering route	Issuer fundraising ceiling	Investor access	Main filing approach
Reg CF	$5 million in 12 months	Accredited and non-accredited investors, with applicable limits	Form C through one registered intermediary
Rule 506(b)	No federal offering-dollar ceiling	Accredited investors and a limited number of sophisticated non-accredited investors	Form D notice and applicable investor disclosures
Rule 506(c)	No federal offering-dollar ceiling	All purchasers must be accredited, with reasonable verification steps	Form D notice
Reg A	Tier 1 up to $20 million; Tier 2 up to $75 million in 12 months	Accredited and non-accredited investors, with applicable Tier 2 limits	SEC-qualified Form 1-A offering statement

Reg CF connects a public community with a regulated process

Reg CF lets eligible U.S. companies raise from accredited and non-accredited investors through one registered intermediary. Non-accredited investors have limits across their Reg CF investments. The issuer files Form C, provides required financial statements, and generally files annual reports after selling securities. The SEC’s Reg CF issuer guidance explains these requirements.

This structure can suit a company that wants customers or supporters to participate alongside larger investors. The company still needs to build demand. Public access does not mean unrestricted advertising of offering terms. Communications have specific rules before and after the Form C filing. See marketing your offering before using an existing sales campaign to promote an investment.

Rule 506(b) requires a private offering approach

Rule 506(b) allows an unlimited amount of capital and an unlimited number of accredited investors. It prohibits general solicitation and public advertising of the securities. Up to 35 non-accredited investors can purchase within any 90-calendar-day period, and they must satisfy the required sophistication standard, alone or with a purchaser representative. Including them also triggers specified disclosure and financial information requirements. The SEC describes Rule 506(b).

A company with established investor relationships may consider this route. A broad invitation to a customer mailing list or a public social-media investment pitch needs a different analysis. Calling recipients “friends of the brand” does not establish that a solicitation is private. Discuss the investor relationships and planned communications with counsel before contacting prospects.

Rule 506(c) permits public solicitation to accredited purchasers

Rule 506(c) permits general solicitation and advertising if all purchasers are accredited investors, the issuer takes reasonable steps to verify that status, and the other conditions are met. There is no federal offering-dollar ceiling. Both Rule 506 routes require a Form D notice within 15 days after the first securities sale, and states can require notices and fees. Read the SEC’s Rule 506(c) summary.

Public visibility can help a company find accredited investors, but it does not allow non-accredited customers to purchase. Plan the verification process as part of the investor experience. A larger audience and a larger eligible buyer pool are different things.

Reg A requires SEC qualification and broader preparation

Reg A has two tiers. Tier 1 allows up to $20 million and generally remains subject to state registration or qualification requirements. Tier 2 allows up to $75 million and preempts those state registration requirements, while preserving applicable state notice requirements and fees. Both tiers require an SEC-qualified offering statement before sales. Qualification does not mean SEC endorsement. The SEC’s Reg A guidance explains the process.

Tier 2 requires audited financial statements and ongoing annual, semiannual, and specified current reports. Non-accredited purchasers generally face investment limits, with an exception for securities to be listed on a national securities exchange upon qualification. Tier 1 has different financial and exit-reporting requirements.

For an issuer considering a larger public raise, the additional capacity belongs in the same decision as the qualification process and continuing reporting workload. A higher ceiling alone does not make a route suitable.

Plan combinations and portal fit before outreach

A company may consider more than one exemption as part of its financing plan. Separate exemptions do not automatically make the offerings independent. Integration rules, investor sourcing, communications, disclosures, and each exemption’s conditions need coordinated review. The SEC’s Reg CF guidance describes the Rule 152 framework for that analysis.

Issuance Express’s published issuer process focuses on Reg CF. We coordinate Form C production and filing, required partners, portal launch, and offering operations. If your plan includes another financing, disclose it during your application so the Reg CF work can account for it. Your counsel can evaluate the overall exemption strategy. Begin with issuer eligibility and offering costs to assess the Reg CF portion of the plan.