October 14, 2026
Equity crowdfunding under Regulation Crowdfunding (Reg CF) lets a US company raise up to $5 million in any 12-month period from anyone, accredited or not, through an SEC-registered funding portal or broker-dealer. You file a Form C with financial statements, run a public campaign, and file annual reports afterward. It suits consumer companies with a loyal community. It’s a poor fit if you’re about to raise from venture funds that don’t want hundreds of small holders on your cap table.
Key takeaways
Every sale of stock, SAFEs or notes is a sale of securities, and it has to be registered with the SEC or fit within an exemption. Most startup rounds use an exemption limited to accredited investors. Reg CF, created by the JOBS Act and in effect since 2016, is the exemption that lets a private company sell to the general public online, in exchange for disclosure and a cap on the amount raised. See Can My Startup Raise Money From Non-Accredited Investors?
It’s different from reward crowdfunding on sites like Kickstarter, where backers get a product or a perk, not a security.
Reg CF is open only to companies organized in the United States. Investment funds and companies that are already SEC reporting companies can’t use it.
You can raise up to $5 million in any 12-month period under Reg CF. You can run a separate exempt round for accredited investors alongside it, as long as each offering meets its own rules.
Accredited investors can invest any amount. Non-accredited investors are limited across all Reg CF offerings in a 12-month period. If either their annual income or their net worth is below $124,000, they can invest the greater of $2,500 or 5% of the greater of their income or net worth. If both are at least $124,000, they can invest 10% of the greater of the two, up to $124,000. The SEC adjusts these figures for inflation every five years. The portal is responsible for checking the limits, not you.
Before the offering, you file a Form C with the SEC. It’s public on the SEC’s EDGAR system and on the portal. It describes the business, the officers and directors, major owners, the terms of the security, the target amount and deadline, how you’ll use the money, the risks and your financial condition, and it includes financial statements.
The level of financial statements depends on how much you’re raising in 12 months:
| Amount raised | Financial statements required |
|---|---|
| Up to $124,000 | Certified by the CEO (reviewed or audited statements if you already have them) |
| $124,000 to $618,000 | Reviewed by an independent CPA |
| $618,000 to $1,235,000 | Reviewed for a first-time Reg CF issuer, audited otherwise |
| Over $1,235,000 | Audited |
You also file a Form C/A for material changes during the offering and progress updates (Form C-U), including one when the offering closes.
Yes. Since 2021, a company can “test the waters” before filing a Form C, asking potential investors whether they’d be interested without taking any money or commitments. The communications have to include certain legends, and you have to file them with the Form C if you go ahead. Once the Form C is filed, advertising the offering’s terms outside the portal is limited, generally to notices that state basic facts about the offering and direct people to the portal. The detailed discussion with investors happens on the portal.
Many Reg CF raises today use a SAFE-style instrument written by the portal, rather than common or preferred stock. Read it carefully. A crowdfunding SAFE often has terms that differ from the Y Combinator post-money SAFE, such as how and when it converts and whether the holders get voting rights at conversion. Don’t assume it works like the SAFEs your angels signed. See SAFE.
A crowdfunding vehicle is a special purpose entity, permitted under SEC rules since 2021, that invests in your company and issues interests to the crowd investors. Your cap table shows one holder instead of hundreds, and the vehicle votes as a single block. Vehicles have their own rules and costs, and the vehicle’s manager has real influence over how that block is voted. Understand who controls it before you agree to one.
Usually not. Crowd investors sign the portal’s subscription documents and, if a crowdfunding vehicle is used, its operating agreement. What you need is board approval of the offering, a Form C with the right financial statements, and a plan for how the crowd holders will vote, either through the vehicle or a proxy built into the security.
Within 120 days after each fiscal year end, you file an annual report on Form C-AR and post it on your website. Annual reports continue until an exit condition applies, such as becoming an SEC reporting company, filing at least one annual report with fewer than 300 holders of record, filing three annual reports with total assets of $10 million or less, the company or a third party buying back all the Reg CF securities, or dissolving. You then file a Form C-TR to stop reporting.
Crowd investors generally can’t resell their securities for one year, except to the company, an accredited investor, a family member, or in a registered offering.
A Reg CF raise costs more time and money than a SAFE round: portal fees, accountant fees and a real marketing campaign. Your financials and offering terms become public. So does your progress: if a campaign stalls short of its target, the investors you pitch next can see it, and a public raise rules out staying in stealth. You set the terms yourself without a lead investor, which sounds like an advantage but means there’s no one negotiating for market terms the next investors will expect. And you end up with many small holders. A crowdfunding vehicle or a proxy reduces the voting problem, but some venture investors still see a crowded cap table as a burden.
Reg CF works best for consumer companies whose customers are already fans: food and beverage, consumer products, local businesses, games, and community-owned projects. The crowd becomes your marketing, and the raise is part of the brand. It works less well for B2B and deep-tech companies, whose customers aren’t the public, and for any company planning to raise an institutional seed or Series A soon.
Go deeper: For a full walkthrough, see our Founder Guide to SAFEs.
If it fits, choose it on purpose. Don’t use it as a workaround to let one friend invest. See What Do I Tell My Friends and Family Interested in Investing in My Startup? and 6 Types of Investors in Startups. If you’d like help deciding whether Reg CF fits your company, contact us.
