Startups Knowledge Base

How does crowdfunding differ from other types of early stage funding?

Unlike other types of early stage funding, crowdfunding must be conducted online through an approved funding portal (that’s us) or broker-dealer. Crowdfunding campaigns can be supported by scores of Investors across the country who see strong potential in your Startup. This engaged crowd can be highly beneficial to a growing business. 

Under Regulation Crowdfunding (Reg CF), holders of these securities do not count toward your threshold that would require securities registration under the Exchange Act as long as you are current with annual report requirements, use a registered transfer agent and have less than $25 million in assets.[1]

Currently, U.S. regulations allow you to raise up to $5 million in a 12-month period through Reg CF.


[1] U.S. Securities and Exchange Commission, Report to the Commission, Regulation Crowdfunding , June 2019, P. 7