US equity crowdfunding rules: Reg CF, Reg A+ and Reg D

There is no single "US equity crowdfunding law". There are several exemptions from SEC registration, and founders routinely research the wrong one. The choice is driven almost entirely by how much you are raising and whether you need to reach non-accredited investors. This page covers each in turn; the main guide covers strategy, cost and the UK equivalent.

Regulation Crowdfunding in Detail

Reg CF exists because of the JOBS Act, and it is the only US route that lets ordinary members of the public buy shares in a startup. That accessibility is the whole point, and it is also the source of every restriction attached to it.

Who can use it

You must be organised under the laws of a US state or territory, with a principal place of business in the US. Excluded: non-US companies, companies already reporting under the Exchange Act, certain investment companies, issuers disqualified under the "bad actor" rules, issuers who have failed to file required annual reports in the previous two years, and companies with no specific business plan or whose plan is to merge with an unidentified company.

How much you can raise

Up to $5,000,000 in any rolling 12 month period, counting amounts raised by entities you control and by predecessors. This is the figure that matters most, because it decides whether Reg CF is viable at all or whether you need to look at Reg A+.

What your investors can put in

Since the 2021 amendments, accredited investors have no Reg CF investment limit. Non-accredited investors do, calculated over a rolling 12 months across all Reg CF offerings:

• If either annual income or net worth is below $124,000: the greater of $2,500, or 5% of the greater of income and net worth.
• If both are $124,000 or above: 10% of the greater of income and net worth, capped at $124,000.

Spouses may calculate jointly. These dollar figures are adjusted for inflation periodically, so confirm the current values before you rely on them.

The single intermediary rule

A Reg CF offering must be conducted exclusively through one online platform, which must be a broker-dealer or funding portal registered with the SEC and a FINRA member. You cannot run the same offering on two portals, and you cannot take investment directly. Our platform breakdowns cover the practical differences: WeFunder, Republic, StartEngine and Netcapital.

Form C, and what you must disclose

You file an offering statement on Form C through EDGAR before the offering begins, and it goes to the intermediary as well. It covers your business, the offering terms, use of proceeds, ownership and capital structure, related-party transactions, risk factors and your financial statements. It is a public document that competitors, customers and journalists can read, which is a strategic consideration in its own right.

Advertising restrictions

This one catches people out. Away from the platform you may only publish a short notice that directs investors to the intermediary and contains limited factual information: the terms of the offering, your name and contact details, and a brief description of the business. The persuasive material lives on the portal. You may communicate freely with investors through the channels the intermediary provides, and if you compensate anyone to promote the offering, that compensation must be clearly disclosed with every communication.

Testing the waters before you file

Since the 2021 amendments you may gauge investor interest before filing Form C. Rule 241 lets you solicit interest generically before you have even chosen an exemption, and Rule 206 lets you do so specifically for a planned Reg CF offering. Both come with conditions: the materials must carry a prescribed legend making clear that no money is being accepted and no commitment is binding, and anything used under Rule 206 must be filed as an exhibit to the Form C. Used well, this is how you legally build the pre-launch commitment described further down. Used carelessly, a testing-the-waters campaign that quietly becomes a solicitation is exactly the kind of fact pattern that invites an integration problem, so agree the boundary with counsel before you start.

What happens to the shares

Securities sold under Reg CF are restricted for twelve months. The exceptions are narrow: transfers back to the issuer, to an accredited investor, as part of a registered offering, or to family members and trusts, or in connection with death or divorce. Tell your investors this before they invest, not after.

The Financial Statement Thresholds

This is the single most common cause of a delayed launch. The standard your accounts must meet depends on how much you are raising, counting what you have already raised under Reg CF in the preceding twelve months.

There is a planning lever here worth noticing. Setting your target just under a threshold can save you a significant sum in professional fees. It can also cap a round you would rather have raised in full, so run the trade-off deliberately rather than discovering it late.

Regulation A+: The Mini IPO

Reg A+ is what you use when Reg CF is too small. Tier 1 allows up to $20 million in a 12 month period, Tier 2 up to $75 million. Both allow non-accredited investors and both permit public marketing, which makes Reg A+ genuinely crowdfunding-shaped at a scale Reg CF cannot reach.

The cost is the difference. You file an offering circular on Form 1-A and the SEC must qualify it, which is a review process rather than a filing. Tier 2 requires audited financial statements and ongoing reporting on Forms 1-K, 1-SA and 1-U. Tier 1 skips the audit requirement but is subject to state-by-state blue sky review, which usually costs more time than the audit saves; most issuers therefore choose Tier 2 precisely because it pre-empts state review.

Reg D: The Private Round Most Founders Actually Need

Reg D is not crowdfunding, and that is exactly why it belongs on this page. It is the exemption under which almost every angel and venture round in the US is raised, and it is where the money that anchors your campaign comes from.

506(b): the classic private round

Unlimited accredited investors, plus up to 35 non-accredited but sophisticated ones. Investors may self-certify their accredited status, which keeps friction low. You file a Form D within 15 days of the first sale. The catch is absolute: no general solicitation of any kind. You may only approach people with whom you or your representatives have a pre-existing, substantive relationship. No public posts about your terms, no cold outreach to a purchased list, no announcing the round on stage.

506(c): the publicly marketed accredited round

506(c) removes the solicitation ban entirely. You may advertise the raise as openly as a crowdfunding campaign. The trade is that every single purchaser must be a verified accredited investor, and verification means reviewing documents such as tax returns, bank statements or a written confirmation from a lawyer, accountant or broker-dealer. A self-certification tick box is not enough, and getting this wrong puts the exemption itself at risk.

For a founder running a public campaign, 506(c) is usually the right parallel instrument. It lets the private round and the public campaign share the same marketing without the solicitation problem described below.

Running a Private Round and a Public Campaign at the Same Time

This is the question that costs founders the most money in legal fees, and the one most articles skip. If you are publicly marketing a Reg CF campaign while also raising privately under 506(b), the SEC may treat those as one integrated offering, in which case the public marketing has broken the 506(b) exemption.

The governing rule is Rule 152, rewritten in 2020 and effective from 2021. It sets out a general integration principle plus several non-exclusive safe harbours, including one based on a thirty day gap between offerings and specific provisions for concurrent exempt offerings. The practical consequences for a founder are:

• Close the 506(b) money before you go public. If the private commitments are done and the offering has terminated before any general solicitation begins, the analysis is far simpler.
• Or use 506(c) instead of 506(b). Since 506(c) permits general solicitation, the public campaign does not contaminate it. Every purchaser must be verified accredited, which is a real administrative burden but a predictable one.
• Keep records of who you spoke to and when. If you ever need to show that a 506(b) investor came from a pre-existing relationship rather than your campaign page, contemporaneous notes are the evidence. This is one of the practical arguments for tracking every investor conversation in a proper CRM rather than a spreadsheet.

One more thing: who you pay, and for what

Paying someone a commission or a success fee for introducing investors to your round generally requires that person to be a registered broker-dealer. Unregistered finders are a persistent problem in early-stage fundraising and the consequences fall on the issuer as well: it can give investors a rescission right against you. Software you use to find and contact investors yourself is a different thing entirely from a person taking a cut of the raise.

The Part the Regulations Do Not Cover

Every requirement on this page is a gate you have to pass. None of them make your campaign succeed. What does is arriving on launch day with capital already committed, and the exemptions above are precisely why that has to happen privately, in advance.

Under Reg CF you may barely advertise off-platform, so you cannot build public momentum before you launch. Under 506(b) you may not solicit at all. The practical consequence is that the investors who fill the first slice of your campaign must be people you approached directly, one at a time, in the weeks before anything went live. That work is unglamorous, it is entirely on you, and it is the strongest predictor of whether the campaign works.

That is the half of the raise Angels Partners is built for: searching 120,000+ angels, VCs and family offices for the ones who actually back public raises in your sector, sequencing them from your own inbox, and tracking every conversation through to the commitment that opens your campaign. Read the strategy in full on the main crowdfunding guide, or see how the same logic applies in the UK regime.

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