SEC VERIFY DATA
TITLE: What Is Regulation Crowdfunding SEC Reg CF Explained
SEO DESCRIPTION: Learn how SEC Regulation Crowdfunding works, including the $5 million limit, Form C filings, funding portals, investor limits and resale restrictions.
WHAT IS REGULATION CROWDFUNDING
Regulation Crowdfunding, commonly called Reg CF, is an SEC exemption that allows eligible companies to raise capital from investors online without conducting a fully registered public offering.
Under current SEC rules, an issuer may raise up to $5 million through Regulation Crowdfunding offerings during a rolling 12-month period. Transactions must take place through a single online intermediary that is either an SEC-registered broker-dealer or a registered funding portal.
WHAT IS FORM C
Companies using Regulation Crowdfunding generally file Form C with the SEC before launching the offering.
Form C can include information about the issuer, business, management, ownership, offering terms, use of proceeds, related-party transactions, financial condition and financial statements. The filing becomes an important public source for investors researching a crowdfunding issuer.
WHO CAN INVEST
Both accredited and non-accredited investors may participate in Regulation Crowdfunding offerings.
Accredited investors are not subject to the same Reg CF investment limits that apply to non-accredited investors. Non-accredited investors are subject to limits based on annual income and net worth.
CAN REG CF SECURITIES BE RESOLD
Securities purchased through Regulation Crowdfunding generally cannot be freely resold for one year, subject to limited exceptions.
This means investors should not assume that a crowdfunding investment can be sold immediately or that a liquid secondary market will exist.
REG CF VS REGULATION D
Regulation Crowdfunding is designed for online fundraising through a registered intermediary and permits participation by non-accredited investors subject to applicable limits.
Regulation D uses different exemptions, including Rule 506(b), Rule 506(c) and Rule 504. Regulation D offerings generally use Form D, while Regulation Crowdfunding offerings use Form C.
WHY REG CF MATTERS
When FilingDossier reviews a Regulation Crowdfunding offering, it may compare Form C disclosures with the issuer's website, management claims, financial information, funding portal and other available public records.
An SEC filing does not mean the Commission has approved or endorsed the investment.
DISCLAIMER
FilingDossier is an independent research platform and is not affiliated with or endorsed by the SEC. This material is provided for informational and research purposes only and does not constitute legal or investment advice.