Regulation Crowdfunding
Up to $5 million in 12 months from the public, through one intermediary, with per-investor limits.
Regulation Crowdfunding lets a company raise up to $5 million in 12 months from the public — including people who are not accredited investors — online, through a single SEC-registered intermediary: a broker-dealer or a funding portal. A non-accredited investor may put in no more than the limits the rule sets.
Regulation Crowdfunding
- Good at
- Open to non-accredited investors
- Public marketing through the platform
- Watch for
- Capped at $5 million in 12 months
- An intermediary, its fees, and ongoing disclosure
- Many small holders on the cap table
- Best for
- Consumer companies with a community of customers who want to invest
Rule 506(b)
- Good at
- No amount limit
- No intermediary needed
- Watch for
- No general solicitation
- Non-accredited investors bring disclosure duties
- Best for
- Most venture rounds
Where this lesson's rules come from
The sources behind this lesson's requirements, by kind. Anything marked as a convention is ours, not the rule-maker's.
- SEC
- 17 CFR §227.100(a)(1) (opens in a new tab)Regulation Crowdfunding: $5 million in 12 monthsFree to read
- 17 CFR §227.100(a)(2)(i) (opens in a new tab)Regulation Crowdfunding: what a non-accredited investor may put inFree to read
- SEC, Regulation Crowdfunding (opens in a new tab)The SEC's page on Regulation Crowdfunding and its intermediariesFree to read
The full map is in US GAAP, and where these rules come from.
The words this page teaches
Each links to its glossary definition, which also names the authority behind it and the components that render it.
- Regulation CrowdfundingThe exemption for raising up to $5 million in 12 months from the public, online, through one SEC-registered broker-dealer or funding portal, with per-investor limits for non-accredited investors
- Accredited investorA person or entity Regulation D trusts to bear a private offering's risk — among others, an individual with more than $1,000,000 of net worth excluding the primary residence, or more than $200,000 of income ($300,000 joint) in each of the last two years with the same expected; a director or executive officer of the issuer; an entity with more than $5,000,000 of assets