What it is
Regulation crowdfunding is a framework created under U.S. securities law. It allows eligible businesses to raise money from many people by offering securities, rather than asking for donations or pre-selling products.
Because securities are involved, the rules are different from reward or donation crowdfunding. Offerings under Regulation Crowdfunding must go through an SEC-registered funding portal or broker-dealer, and issuers generally must make specific disclosures to the SEC and to prospective investors.
Reg CF is one of several exemptions from full securities registration. Others work differently, with different rules on who may invest, how companies may advertise and what must be filed. Limits and requirements change over time, so the SEC and a securities attorney are the right places to confirm current details.
How it’s traditionally been approached
Traditionally, small businesses have funded growth through savings, loans, friends and family, or private investors. Selling securities to the public was usually reserved for larger companies that went through a full registration process.
Regulation crowdfunding was designed to open a more limited, rules-based path for smaller companies to reach a wider community. Many founders see it as a way to raise funds while also building a base of customers and supporters.
Others prefer different routes, such as bank financing, private placements under other exemptions, or donation and rewards campaigns. Each approach has its own tradeoffs in cost, time, disclosure and control, and none is right for everyone.
How the right fundraising pro may help
The right fundraising pro may help you understand whether Reg CF is even a fit for your situation. A good guide can explain the general process, the role of the funding portal, and how Reg CF compares with other options, while leaving legal conclusions to your securities attorney.
A first conversation is usually about your business, your goals and your timeline. A pro may also help with organizing your story, planning outreach to your community and keeping your messaging truthful and consistent with your filings. Results are never guaranteed, and a campaign may not reach its goal.
Useful questions to ask include: What does your experience cover, and what is outside your scope? How do you work alongside my securities attorney and tax professional? What will I be responsible for? How are your services billed? How do you keep marketing accurate and compliant?
The bigger picture
Raising money from many people can carry real emotional weight. Founders may feel pride in community support, along with pressure about expectations, transparency and the responsibility of having supporters who hold a stake in the business.
Taking time to understand the rules, ask questions and build a trusted team can bring peace of mind. If stress starts to affect your sleep, health or family life, it is okay to slow down, talk with people you trust and, if helpful, explore wellness support through Providers.plus.
Keep in mind
- Equity raises must go through an SEC-registered funding portal or broker-dealer, and investing in these offerings is risky and illiquid.
- Rules, limits and thresholds change, so confirm current requirements with the SEC and a securities attorney rather than relying on any web page.
- Be truthful and specific in everything you say, and use funds as described. Misusing money raised can be fraud.
- Ask a tax professional how a raise may affect your taxes, since outcomes depend on the facts. 2A Crowd is an independent directory, not an advisor.
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 regulation crowdfunding?
Regulation crowdfunding, or Reg CF, is a set of U.S. securities rules that lets eligible companies offer securities to the public online through an SEC-registered funding portal or broker-dealer. It has its own disclosure and filing requirements. Check the SEC and a securities attorney for current details.
Is Reg CF the same as donation crowdfunding?
No. Donation and rewards crowdfunding do not offer securities, while Reg CF involves selling securities and is regulated accordingly. Because the rules differ, the questions to ask and the risks involved are different too.
Who regulates regulation crowdfunding?
The U.S. Securities and Exchange Commission (SEC) oversees Reg CF. Funding portals and broker-dealers that host offerings also have regulatory roles. For specifics on your situation, consult a securities attorney.
Is investing through Reg CF risky?
Yes. Investing in early-stage or small companies is risky, and the securities are generally illiquid, meaning they may be hard to sell. Anyone considering an investment should read the offering disclosures carefully and consider speaking with a qualified professional.
Can a fundraising pro guarantee my Reg CF campaign will succeed?
No. A fundraising pro may help you plan, organize your message and understand the process, but no one can promise a campaign will reach its goal. Be cautious of anyone who offers guarantees.
Where can I get help with a fundraiser?
You can browse independent fundraising pros and educational resources in the 2A Crowd directory. When you are ready to begin a donation or community campaign, you can Start a fundraiser on 2a.support. For securities offerings, consult a securities attorney first.
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.