Regulation Crowdfunding
Raise up to $5 million in 12 months from the public, including people who are not wealthy investors, by selling shares, debt or other securities through one SEC-registered online platform.
- Shares
How it works
Regulation Crowdfunding is an SEC exemption that lets an eligible US company sell securities to the public online without registering the offering. You choose what to sell: shares, debt, or another kind of security such as a revenue share or a convertible instrument.
- One platform: the whole offering runs through one online platform, which must be a broker-dealer or a funding portal registered with the SEC and FINRA.
- Limit: up to $5 million in any 12 months, counting only Regulation Crowdfunding sales.
- Investors: anyone can invest, but investors who are not accredited are limited across all crowdfunding offerings in 12 months: the greater of $2,500 or 5% of their income or net worth (whichever is greater) if either is under $124,000, or 10% if both are $124,000 or more, and never more than $124,000.
- Form C: you file an offering statement on the SEC's EDGAR system and with the platform. It covers your officers, directors and owners of 20% or more, the business, the use of the money, the price, the target amount and deadline, and your financial condition.
- Financial statements: for $124,000 or less, statements and tax return figures certified by your chief executive; up to $618,000, statements reviewed by an independent accountant; above that, audited statements, except that a first-time issuer raising up to $1,235,000 can use reviewed ones.
- Target and deadline: investors can cancel until 48 hours before the deadline. If the offering does not complete, the platform must return investors' money within five business days.
- Advertising: outside the platform you can publish only a short notice of the offering's basic terms that sends people to the platform. Anyone you pay to promote it on the platform must say they are paid. Before filing Form C you can "test the waters" to see if there is interest, using the required statements.
- After the raise: you file an annual report on Form C-AR within 120 days of your year end and post it on your website, until one of the rule's end points applies. Investors generally cannot resell their securities for a year.
Upsides and downsides
Upsides
- Raise money from your customers and community, not only from wealthy investors
- You choose the security, including debt, so you need not give up shares
- You can test the waters before you commit to an offering
- The offering does not need to be registered with each state
Downsides
- Your finances, owners and plans become public on EDGAR
- Review or audit costs, platform fees and ongoing annual reports
- You cannot advertise the offering freely outside the platform
- Many small investors to report to and keep informed
Risks
- If you miss your target by the deadline, the money goes back to investors and you raise nothing
- Anti-fraud rules apply, so misleading statements in Form C or on the platform can lead to claims against the company and its people
- Investors can lose their money, and an unhappy crowd can harm your reputation
What it costs
- How it is priced
- The securities you sell, plus the platform's fee, shown in Form C as a dollar amount or a percentage of the money raised
- Costs that are easy to miss
- An accountant's review or audit of your financial statements once you raise more than $124,000
- Legal and filing work for Form C, progress updates and annual reports
- Some platforms take a stake in your company as part of their fee
- State notice filings and fees in some states
In any 12 months, counting only Regulation Crowdfunding sales.
Selling shares? Ownership after each round: see what you would own after each round
Thinking of an offering? Cost of a Regulation Crowdfunding offering: see which financial statements you need and what you keep
Does it fit?
Could fit when
- You have loyal customers or a community who would invest
- You want to raise up to $5 million and are willing to share a small stake or offer debt
Unlikely to fit when
- You need more than $5 million in 12 months
- You need the money within weeks
- You do not want your finances made public
Who can use it
- Business types: LLC, S corporation, C corporation, Benefit corporation, Cooperative
- A company organized in the US
- Not an SEC reporting company or an investment company, and with a specific business plan
- No disqualifying events for the company, its directors, officers or owners of 20% or more ("bad actor" rules)
- Up to date with annual reports for any earlier Regulation Crowdfunding offering
- An S corporation can have no more than 100 shareholders, who must be individuals or certain trusts and estates, so selling shares to a crowd would end its S status
Am I ready?
What a provider is likely to ask for. Tick what you have. Your ticks stay in this browser and nothing is stored. Checklist for all crowdfunding and community finance
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0 of 5 ticked
- Financial statements at the right level
- Offering terms
- Ownership table
Regulation and protections
Regulators: U.S. Securities and Exchange Commission (SEC); Financial Industry Regulatory Authority (FINRA); State securities regulators.
Who runs it: Private providers, nationwide.
The platform must be registered with the SEC and be a FINRA member, and federal anti-fraud rules apply to everything you say about the offering. The offering is not registered with the states, but states can require notice filings and fees and can act against fraud.
Types of provider: Funding portals registered with the SEC and FINRA; Broker-dealers that run crowdfunding platforms.
Crowdfunding portals and broker-dealers (Regulation Crowdfunding): 10 examples in the directory · chosen from an official list by a stated rule, never for payment
Also consider
What has changed
No changes since this page was published. It was last checked against its sources on October 17, 2026.
Sources
- SEC: Regulation Crowdfunding · checked October 17, 2026
- SEC: Regulation Crowdfunding, Guidance for Issuers · checked October 17, 2026
- 17 CFR Part 227: Regulation Crowdfunding · checked October 17, 2026
- SEC: Frequently asked questions about exempt offerings (state law) · checked October 17, 2026
- IRS: S corporations (requirements) · checked October 17, 2026
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