Regulation Crowdfunding (Reg CF) is a U.S. Securities and Exchange Commission (SEC) exemption that allows small businesses and startups to raise capital from the general public—including non-accredited investors—through SEC-registered online crowdfunding platforms or custom issuer specific Reg CF websites owned and administered by a broker dealer. Under Reg CF, companies can raise up to $5 million per year. Individual investors are subject to annual investment limits based on their income and net worth to protect them from excessive risk.

To use Reg CF, a company must file Form C with the SEC, which includes basic information about the business, the offering, and financial statements (which may need to be reviewed or audited depending on the raise size). The offering must take place through a FINRA-registered funding portal or broker-dealer. Companies must also provide updates and final reports to investors after the raise. Reg CF is popular because it allows entrepreneurs to turn their community, customers, and fans into investors while building brand loyalty and public support, but it comes with limitations on how much can be raised and requires compliance with certain disclosure and reporting rules.

Red Rock Securities Law’s Regulation CF offering preparation services include the securities offering legal work and SEC filing preparation, introduction to an intermediary broker dealer, and the build of a custom Regulation CF raise portal to administer the offering. 

Interested in learning more? Contact us today at (720) 586-8610