The world of fundraising has changed forever. Once, companies seeking to raise capital had to choose between the slow-moving world of venture capital and the high-stakes realm of public markets. Today, Regulation A+—often called the “mini-IPO”—has rewritten that playbook. It allows businesses to raise up to $75 million from both accredited and non-accredited investors without the full burden of a traditional public offering. For startups, growth-stage firms, and established private companies, Reg A+ offers the best of both worlds: public access and private flexibility. But with this freedom comes a critical question—one that can define the entire trajectory of your raise: do you need a broker-dealer to manage your Regulation A+ offering? The answer isn’t as simple as yes or no. It depends on your strategy, your structure, and your risk tolerance. Understanding the role broker-dealers play in the Reg A+ ecosystem can help you decide whether to partner with one or go directly to market.
Understanding the Role of Broker-Dealers
A broker-dealer is more than just an intermediary—they’re the connective tissue between issuers and investors. In the simplest terms, broker-dealers are licensed entities authorized by the Financial Industry Regulatory Authority (FINRA) and the SEC to sell securities, handle investor funds, and ensure that offerings are conducted lawfully and ethically.
For Regulation A+ offerings, broker-dealers can provide a range of services: from investor verification and compliance oversight to marketing guidance and fund escrow management. They ensure that every transaction meets securities laws, particularly when selling to retail investors—a group that makes up a large portion of Reg A+ participants.
The regulatory oversight is key. By involving a licensed broker-dealer, issuers gain an extra layer of protection. Investors know that a regulated third party is monitoring the raise, and regulators see that the issuer is operating within established legal frameworks. In essence, a broker-dealer adds credibility, compliance assurance, and operational efficiency to your fundraising campaign.
However, their involvement isn’t mandatory in every case, and the decision to hire one depends on how you plan to structure and market your offering.
When a Broker-Dealer Is Required
There’s a fine legal line between marketing your own securities and conducting activities that require broker-dealer registration. If your company—or any third-party partner—solicits investments, handles investor funds, or receives transaction-based compensation for bringing in investors, you’ll likely need a broker-dealer involved.
Regulation A+ offerings fall under the Securities Act of 1933, and the SEC closely monitors how securities are sold. In Tier 2 offerings, where you can raise up to $75 million, sales often extend across multiple states and involve hundreds or even thousands of investors. Without a broker-dealer, you must navigate complex compliance requirements on your own, including anti-money laundering (AML) checks, know-your-customer (KYC) procedures, and adherence to Blue Sky laws where applicable.
In many states, broker-dealer involvement is not just advisable—it’s required. Some jurisdictions insist that securities sold to residents within their borders go through a registered broker-dealer, regardless of whether the offering is qualified under federal law. This patchwork of regulations makes broker-dealer participation a practical necessity for most national raises.
For companies raising smaller amounts or conducting self-directed offerings through online platforms, it’s possible to structure a Reg A+ raise without a broker-dealer. But even then, the risks—both legal and reputational—must be carefully weighed.
The Benefits of Partnering with a Broker-Dealer
Beyond compliance, a broker-dealer can enhance your offering in ways that directly influence investor trust and campaign performance.
The first benefit is credibility. Retail investors may be unfamiliar with Regulation A+ offerings and naturally cautious about investing online. A licensed broker-dealer’s involvement signals legitimacy. It shows investors that the offering has been vetted, that funds are being handled securely, and that regulatory protocols are being followed.
Broker-dealers also provide logistical and technical support. They manage escrow accounts, ensure timely fund disbursement, and monitor subscription agreements. Many work alongside online investment platforms to streamline investor onboarding—verifying accreditation where necessary and executing digital transactions efficiently.
Another major advantage is risk mitigation. Selling securities without proper licensing or compliance procedures can lead to severe penalties, rescission rights for investors, and even enforcement actions. A broker-dealer assumes responsibility for these aspects, shielding issuers from potential legal exposure.
Lastly, a broker-dealer’s network can open doors. Many firms maintain relationships with institutional investors, family offices, and high-net-worth individuals who frequently participate in Reg A+ offerings. Their endorsement can help bridge the gap between retail enthusiasm and sophisticated capital.
The Costs and Considerations of Hiring a Broker-Dealer
While the benefits are substantial, broker-dealer services come at a price. Understanding those costs—and the structure behind them—is essential when deciding whether to include one in your Reg A+ strategy.
Most broker-dealers charge a percentage of the total funds raised, typically ranging from 5% to 10%, depending on the offering’s complexity and size. Some also include flat fees for due diligence, regulatory filings, and ongoing compliance monitoring. Additionally, if the broker-dealer brings in investors through their own network, they may receive additional performance-based compensation.
These costs can be significant, especially for startups operating with tight budgets. However, they often pale in comparison to the potential risks and liabilities of conducting an offering incorrectly. The peace of mind that comes with knowing your raise is compliant—and the investor confidence it generates—can justify the expense.
Still, not all broker-dealers are created equal. Some specialize in crowdfunding and online offerings, while others focus on institutional placements. The right fit depends on your goals. Before signing with any firm, issuers should conduct their own due diligence: review licensing status, check FINRA records, and confirm that the broker-dealer has experience with Reg A+ raises specifically.
Choosing the wrong partner can lead to delays, miscommunication, or even disqualification of your offering. Choosing the right one can accelerate your campaign and legitimize your entire brand.
Going It Alone: The Self-Directed Reg A+ Raise
Some companies choose to launch their Reg A+ offering without a broker-dealer. Known as “self-directed” raises, these campaigns rely on the issuer to handle marketing, investor communication, and compliance. This approach can save money and provide more control—but it’s not without significant challenges.
Self-directed offerings are best suited for companies with established customer bases or strong brand loyalty. For example, consumer-facing businesses like craft breweries, tech startups, or real estate developers often attract direct investment from their own communities. By leveraging digital marketing, email campaigns, and social media, these companies can engage retail investors directly without intermediaries.
However, the absence of a broker-dealer means the issuer must handle all investor verification, AML/KYC compliance, escrow management, and transactional logistics. They must also ensure that none of their team members engage in unlicensed solicitation—a common pitfall that can trigger SEC scrutiny.
While the self-directed model offers flexibility and cost savings, it demands a high degree of legal sophistication and operational discipline. Most companies opting for this route partner with specialized technology providers and securities law firms to fill the compliance gap.
For many issuers, the decision comes down to bandwidth and risk tolerance. If your team can confidently manage the complexities of securities law and investor operations, self-direction may be viable. If not, partnering with a licensed broker-dealer can save time, mitigate risk, and enhance credibility.
Hybrid Models and the Rise of Online Platforms
In today’s digital era, a new model has emerged that blends the best of both worlds. Many Reg A+ issuers now work through online investment platforms—also known as funding portals—that integrate technology, marketing, and compliance into a seamless investor experience.
These platforms often partner with broker-dealers to handle the regulatory side while allowing issuers to maintain control over branding and outreach. Investors can review offerings, complete KYC checks, and invest online, while the broker-dealer oversees compliance and transaction execution in the background.
This hybrid structure has revolutionized how Regulation A+ offerings are conducted. It democratizes access to capital by making it easier for companies to reach thousands of investors while maintaining full legal compliance. Broker-dealer partnerships are often invisible to the investor but crucial to the offering’s legitimacy.
Platforms like these have lowered barriers to entry, allowing more companies—from consumer brands to real estate funds—to tap into the power of Reg A+. The result is a more efficient, transparent, and investor-friendly marketplace that merges compliance oversight with digital convenience.
How Broker-Dealers Shape the Future of Reg A+
As Regulation A+ continues to mature, broker-dealers will play an increasingly vital role in its evolution. Their involvement brings structure, transparency, and confidence to a rapidly expanding segment of the private capital market.
Investors—especially retail ones—expect accountability. Broker-dealers provide that by ensuring every sale meets SEC and FINRA standards. This oversight helps legitimize Reg A+ as a reliable fundraising vehicle, attracting more investors and institutions to participate in these offerings.
Moreover, as international interest in Reg A+ grows, broker-dealers may become essential intermediaries for cross-border raises. Their ability to navigate multiple jurisdictions, conduct due diligence, and verify investor identities will be critical in maintaining global compliance.
In many ways, the broker-dealer’s role is shifting from gatekeeper to partner. They’re no longer just intermediaries; they’re advisors helping issuers design smarter, safer, and more strategic raises. Their expertise in regulatory trends, market behavior, and investor psychology makes them invaluable allies in a complex financial landscape.
Choosing the Path That Fits Your Vision
So, do you need a broker-dealer for your Reg A+ raise? The answer depends on your goals, resources, and investor base. If you plan to market widely, cross state lines, or attract retail investors, a broker-dealer isn’t just advisable—it’s a strategic asset. If you already have a loyal audience and the infrastructure to handle compliance, a self-directed approach may offer greater control and cost efficiency. In both cases, knowledge is power. Understanding the role of broker-dealers allows you to make informed choices, structure your raise effectively, and avoid compliance pitfalls that could derail your campaign. Regulation A+ has opened doors that were once closed to all but the largest corporations. It’s a framework built on access, transparency, and opportunity. Broker-dealers are the architects who help companies walk through those doors safely and successfully. Whether you choose to work with one or not, their influence on the ecosystem is undeniable. In the end, the best Reg A+ raises aren’t just compliant—they’re confident. And confidence begins with clarity, strategy, and integrity in every decision you make.
