====== Regulation Crowdfunding (Reg CF) Exemptions ======


process_id: L-US-FED-SEC-001
title: Regulation Crowdfunding (Reg CF) Exemptions
description: >
  Detailed requirements and process for conducting a securities offering
  under Regulation Crowdfunding (Reg CF), including issuer eligibility,
  offering and investor limits, disclosure requirements, use of
  intermediaries, advertising restrictions, ongoing reporting, and
  resale restrictions.
category: financial-processes/securities
jurisdiction:
  country: US
  level: federal
  regulatory_body: SEC
source_authority:
  name: U.S. Securities and Exchange Commission
  url: https://www.sec.gov/education/smallbusiness/exemptofferings/regcrowdfunding
status: draft
version: 1.0.0
created_date: 2026-01-05
last_reviewed: 2026-01-05
contributors: ["@anson_parker"]
license: CC-BY-SA-4.0
process_type: branching
is_executable: false
complexity: complex
risk_level: high
confidence_level: guidance
soundness_verified: false
tags: ["securities", "crowdfunding", "reg-cf", "SEC", "federal", "fundraising", "startup-funding"]

===== Overview ===== Regulation Crowdfunding (Reg CF) allows eligible companies to offer and sell securities through crowdfunding. This model covers the complete requirements process under [[https://www.sec.gov/education/smallbusiness/exemptofferings/regcrowdfunding|SEC Regulation Crowdfunding]], from issuer eligibility through resale restrictions. See also: [[https://www.wikidata.org/wiki/Q348303|Wikidata: Crowdfunding]] ===== Detailed Reg CF Requirements ===== 1. Issuer Eligibility - Must be a U.S. company organized under U.S. state or territorial laws - Cannot be an SEC reporting company, investment company, or blank check company - Must not be disqualified under "bad actor" rules (Rule 503 of Regulation Crowdfunding) - Must have a specific business plan (not just to engage in a merger or acquisition with an unidentified company) 2. Offering Limit - Can raise up to $5 million in a 12-month period - This limit includes all Reg CF offerings within the past 12 months - Must aggregate amounts sold in reliance on Reg CF with amounts sold in reliance on Rule 504 of Regulation D and in reliance on other exemptions 3. Investor Limits - For investors with annual income or net worth less than $107,000: - Greater of $2,200 or 5% of the lesser of annual income or net worth - For investors with both annual income and net worth of $107,000 or more: - 10% of the lesser of annual income or net worth - Accredited investors have no limits - All investor limits are calculated across all Reg CF offerings in a 12-month period 4. Disclosure Requirements - File Form C with the SEC, which includes: - Information about officers, directors, and owners of 20% or more of the company - Description of the company's business and use of proceeds - Price of the securities or method of determining the price - Target offering amount and deadline - Company's financial condition - Financial statements: - Offerings up to $124,000: Financial statements and specific line items from income tax returns, certified by the principal executive officer - Offerings between $124,000 and $618,000: Financial statements reviewed by an independent public accountant - Offerings over $618,000: - For first-time Reg CF issuers: Reviewed financial statements - For repeat Reg CF issuers: Audited financial statements - Disclose risks to investors - File annual reports (Form C-AR) and termination reports (Form C-TR) as needed 5. Use of Intermediaries - Must use a single intermediary registered with the SEC (as a broker-dealer or funding portal) - The offering must be conducted exclusively through the intermediary's platform - Intermediary must: - Provide educational materials to investors - Take measures to reduce fraud risk - Make issuer information available for at least 21 days before any sale of securities - Facilitate the offer and sale of crowdfunded securities 6. Advertising Restrictions - Issuers may not advertise the terms of a Reg CF offering except in a notice that directs investors to the intermediary's platform - The notice is limited to: - A statement that the issuer is conducting an offering - The terms of the offering - The name of the intermediary through which the offering is being conducted - A link to the intermediary's platform 7. Ongoing Reporting - File annual reports with the SEC and provide them to investors - The annual report includes information similar to what's in Form C - This obligation continues until: - The issuer becomes a reporting company required to file reports under Exchange Act Section 13(a) or 15(d) - The issuer or another party repurchases all of the securities issued in the Reg CF offering - The issuer liquidates or dissolves its business in accordance with state law 8. Resale Restrictions - Securities purchased in a Reg CF offering generally cannot be resold for one year - Exceptions allow resales to: - The issuer - An accredited investor - A family member - In connection with the death or divorce of the purchaser - Or as part of an offering registered with the SEC ===== BPMN Model ===== start-eligibilityCheck start-eligibilityCheck eligibilityCheck-task1 eligibilityCheck-task1 task1-investorLimitCheck task1-investorLimitCheck investorLimitCheck-task8 investorLimitCheck-task9 investorLimitCheck-offeringLimitCheck investorLimitCheck-task8 task8-offeringLimitCheck investorLimitCheck-task9 task9-offeringLimitCheck task8-offeringLimitCheck task9-offeringLimitCheck investorLimitCheck-offeringLimitCheck offeringLimitCheck-task2 offeringLimitCheck-task2 task2-task3 task2-task3 task3-task4 task3-task4 task4-task5 task4-task5 task5-task6 task5-task6 task6-task7 task6-task7 task7-end task7-end