A company with a large customer audience and a company negotiating with a handful of professional investors may need very different offering plans. The amount you want to raise is one part of that decision. Your investor audience, outreach, financial preparation, and ability to meet continuing obligations matter too.
An offering of securities must be registered or fit an available exemption. A familiar label such as “seed round” or “community round” does not establish the legal basis for it. The SEC’s offering pathways overview is a useful starting point.
How do the main offering paths compare?
This table summarizes the paths covered in this guide. It is a starting point for discussion with securities counsel, not a determination of eligibility.
| Path | Potential investors | Public outreach | Federal offering limit | Key preparation |
|---|---|---|---|---|
| Reg A, Tier 1 | Accredited and non-accredited investors | Permitted, subject to offering-stage rules | $20 million in a 12-month period | SEC qualification and applicable state qualification |
| Reg A, Tier 2 | Accredited and non-accredited investors, with limits for many non-accredited purchases | Permitted, subject to offering-stage rules | $75 million in a 12-month period | SEC qualification, audited financials, and ongoing reports |
| Rule 506(b) | Accredited investors and a limited number of sophisticated non-accredited purchasers | General solicitation prohibited | No dollar cap under this rule | Investor relationships, disclosures, and eligibility |
| Rule 506(c) | Accredited purchasers only | General solicitation permitted | No dollar cap under this rule | Reasonable steps to verify accreditation |
| Reg S | Investors in qualifying offshore transactions, subject to the applicable conditions | No directed selling efforts in the United States | No general dollar cap under this safe harbor | Offshore distribution, local law, and transfer controls |
The operative provisions include Rule 251 for Reg A and Rule 506 for Reg D. Reg S has category-specific conditions beyond its core offshore requirements. The SEC’s Reg S release explains why preventing securities from flowing improperly back into the United States matters.
The exemption is separate from the instrument investors buy. Review stock, notes, and SAFEs, then use the valuation and dilution examples to understand how a proposed equity financing changes ownership.
Who do you actually want to reach?
Describe the intended audience before you choose a landing page or run an advertisement.
If the plan depends on letting ordinary customers participate, an accredited-only offering may exclude much of that audience. If the plan centers on existing investor relationships, public advertising may add little value. If investors are offshore, their location alone does not settle the legal analysis.
Write down where investors are, how you know them, and whether the plan depends on reaching people you have never met. Then read the relevant Reg A, Reg D, or Reg S guide with that audience in mind.
What can your company operate after closing?
The launch page gets attention, but the operating obligations last longer. For Reg A Tier 2, budget for audited financial statements and continuing SEC reports. For a private offering, plan for contractual investor information rights, records, and restrictions on resale. A successful close does not make the securities freely tradable or create a trading market.
Compare the recurring workload alongside the upfront work. Who will own the reporting calendar? Who will answer investor questions? Who will reconcile accepted subscriptions with the ownership record? Those questions belong in the original offering budget.
Can you combine offering paths?
Sometimes, but a second exemption is not a workaround for a condition in the first. A company considering concurrent domestic and offshore offerings needs a coordinated plan for communications, investor eligibility, documents, and transfers.
Rule 152 addresses when offerings are considered together, known as integration, and provides specific safe harbors. Have counsel examine both simultaneous offerings and the sequence of earlier and later rounds. Do that before changing a private campaign into a public one.
Hypothetical example. A consumer business wants its customers to invest, while a software company has several established accredited backers. The consumer business might investigate Reg A and its preparation burden. The software company might begin by evaluating Rule 506(b). Neither conclusion follows from company type alone. Their actual outreach, eligibility, timing, and investor needs determine whether either approach works.
How Issuance fits
Issuance supplies technology for offering pages, investor onboarding, checkout, and offering administration. The issuer and its professional team establish the legal structure and make the relevant offering decisions. Software setup and securities-law readiness are separate milestones.
For Regulation Crowdfunding, visit Issuance Express, our funding portal subsidiary. For the paths discussed here, bring your proposed exemption, audience, and operating needs to an Issuance platform conversation. That gives the team a concrete plan to discuss.