What it is
A funding portal is an online platform that is registered with the SEC and is a member of a national securities association. Its role is to connect companies that want to raise money through Regulation Crowdfunding with people who may choose to invest. Under Reg CF, equity raises must go through an SEC-registered funding portal or a registered broker-dealer.
Funding portals operate under rules that are different from those for a traditional brokerage. In general, they are limited in what they may do. For example, they are not meant to give investment advice or recommendations, and the rules restrict how they may handle certain activities. The exact rules change over time, so readers should check with the SEC and a securities attorney.
It helps to separate a funding portal from other kinds of crowdfunding sites. Donation and rewards sites let supporters give or pre-order without receiving ownership. Reg CF is different because it involves selling securities, which brings disclosure requirements, investor protections and real risk. Investing in these offerings is risky and illiquid, and people may lose some or all of what they put in.
How it’s traditionally been approached
Traditionally, small businesses raised money from savings, family and friends, bank loans, or private investors they already knew. Selling ownership to the general public was usually limited to heavily regulated and costly routes, which were out of reach for many small companies.
Regulation Crowdfunding was created as one exemption that lets eligible companies raise money from a broader group of people online, with rules about disclosures and the use of an intermediary. Other exemptions exist too, each with its own requirements, and they differ in who can invest, how a company may advertise, and what filings are needed.
Companies using a funding portal have generally prepared required disclosures, described their business and plans, and filed information with the SEC. Many have worked with attorneys, accountants and marketing professionals along the way. Each approach has tradeoffs, and the right path depends on the company's facts and goals.
How the right fundraising pro may help
The right independent fundraising pro may help you understand how a funding portal fits into your overall plan. That might include explaining the difference between Reg CF and other exemptions, helping you think through your story and audience, and pointing out when you should bring in a securities attorney. It is a possibility, not a promise, and no one can guarantee a raise will succeed.
A first conversation is usually an educational one. A pro may ask about your business, your goals, your timeline and your existing community. You might ask what experience they have with equity crowdfunding, which parts of the process they handle and which belong to your lawyer or accountant, and how they communicate honestly with potential investors.
Good questions to bring include: How do I know whether Reg CF fits my situation? What does working with a funding portal generally involve? How are fees and payout terms typically structured, in general terms? What should I discuss with a tax professional? Always make sure your claims are truthful and specific, since misleading investors or misusing funds can be fraud.
The bigger picture
Raising money by selling ownership is a big decision. It can bring excitement, but also stress about legal rules, public communication and responsibility to the people who trust you. Taking time to learn the basics can bring more peace of mind and help you make choices that match your values and your family's finances.
Think about the whole person behind the business: your health, your relationships and your sense of purpose. If the pressure of a launch is weighing on you, it is okay to slow down, lean on your faith and community, and seek support. If you are a health or wellness professional building a practice, Providers.plus may be a helpful place to explore related resources.
Keep in mind
- Equity raises must go through an SEC-registered funding portal or broker-dealer, and investing is risky and illiquid.
- Rules and limits change, so check with the SEC and a securities attorney rather than relying on any general web page.
- Whether funds are taxable or deductible depends on the facts, so ask a tax professional.
- Be truthful and specific in everything you say, follow each platform's terms and payment rules, and never promise results.
Not sure where to start? Answer a few gentle questions and choose who you’d like to hear from.
Start a fundraiser →Frequently asked questions
What is a funding portal?
A funding portal is an SEC-registered online intermediary that hosts Regulation Crowdfunding (Reg CF) offerings, connecting eligible companies with people who may choose to invest. It operates under specific rules and is generally limited in the activities it can perform. This is general education, not a recommendation of any offering.
Is a funding portal the same as a broker-dealer?
No, they are different kinds of registered intermediaries. Reg CF offerings must be run through either an SEC-registered funding portal or a registered broker-dealer. Funding portals have a narrower set of permitted activities, so ask a securities attorney which fits a given situation.
Do I have to use a funding portal for equity crowdfunding?
For a Reg CF equity raise, yes, the offering must go through an SEC-registered funding portal or broker-dealer. Other exemptions have different requirements. A securities attorney can explain which one may apply to you.
Is investing through a funding portal safe?
No investment is risk-free, and investing through a funding portal is risky and illiquid. People may lose some or all of their money and may not be able to sell their shares easily. Anyone considering it should read the disclosures carefully and consider professional advice.
How can a fundraising pro help with a funding portal campaign?
A fundraising pro may help you understand the process, shape a clear and truthful message, and plan outreach to your community. They do not replace a securities attorney, and they cannot guarantee any result. Ask each pro what they do and what they leave to other professionals.
Are funds raised through a funding portal taxable?
It depends on the facts of your situation, including how your business is structured and how the money is treated. Ask a qualified tax professional rather than assuming any outcome. A tax and accounting pro listed in the directory may be a good starting point.
Educational resource. 2A Crowd shares general information and connects people with independent fundraising pros. It is not professional advice. Talk with a qualified professional about your own situation.