Regulation A+ is specifically designed so that ordinary people (non-accredited investors) can participate. You do not have to be an “accelerated” (accredited) investor to buy stock in a Reg A+ offering.
However, the rules for “ordinary” investors depend on which Tier the company chooses for its raise:
1. Tier 1 (Raising up to $20 Million)
- Who can invest: Anyone (ordinary people and accredited investors).
- Investment Limits: There are no limits on how much an ordinary person can invest. If an individual wants to put $100,000 into a Tier 1 offering, they are legally allowed to do so, regardless of their income.
2. Tier 2 (Raising up to $75 Million)
This is the more common route for larger raises. Because the stakes are higher, the SEC imposes “safety caps” for non-accredited investors:
- Who can invest: Anyone.
- Investment Limits for Ordinary People: You are limited to investing a maximum of 10% of whichever is greater: your annual income or your net worth (excluding your primary home).
- Example: If you earn $70,000 a year, you can generally invest up to $7,000 in a single Reg A+ Tier 2 offering.
- Accredited Investors: Have no limits on how much they can invest.
| Feature | Ordinary Person (Non-Accredited) | Accredited Investor |
|---|---|---|
| Can they invest? | Yes (in both Tier 1 & 2) | Yes (in both Tier 1 & 2) |
| Tier 1 Limit | No limit | No limit |
| Tier 2 Limit | 10% of Income or Net Worth | No limit |
| Verification | Usually “self-certification” (you check a box) | May require proof of income/assets |
Why this matters
Regulation A+ is often called “the people’s IPO” because it allows a company to market its stock to its own customers and fans, rather than just wealthy venture capitalists.
Would you like me to explain the “Accredited Investor” definition so you can see which category you or your potential investors fall into?