Reg A or Regulation A+ is law within the Jumpstart Our Business Startup Act (JOBS) that came into effect on June 19, 2015, and allows companies, startups, and entrepreneurs to raise funding capital from the entire public which includes both accredited and non-accredited investors.
Before the JOBS Act, which was signed into law in October 2012 by former President Barack Obama, startup entrepreneurs and business owners were limited to a small selection of investors that were able to physically invest capital in their startups.
Additionally, investors were also limited, and only a selected amount of investors were able to invest in startups.
Those who were able to invest in startups referred to as accredited investors were those who:
The JOBS Act managed to change the status quo and now allows startups and entrepreneurs to take advantage of crowdfunding capabilities offered by the general public and the internet.
Regulation A+ enables both small-time investors and startup entrepreneurs to obtain funding from a larger pool of interested investors.
This means instead of having accredited investors as the sole participant, entrepreneurs can now raise funds from a larger crowd, including, and not limited to, family, friends, community members, customers, or interested parties online.
Reg A simply now makes it easier to allow those who have the capital to come in contact with those businesses that require it, regardless of their size or profitability.
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