# Regulation Crowdfunding

> Up to $5 million in 12 months from the public, through one intermediary, with per-investor limits.

Source: https://lopifi.com/learn/securities-law-for-startup-fundraising/regulation-crowdfunding
Part of: Lopifi — US GAAP books on autopilot, checked by a CPA (https://lopifi.com)

---

**What is Regulation Crowdfunding and how much can a startup raise?** Up to $5 million in 12 months from the public, through one intermediary, with per-investor limits.

[Regulation Crowdfunding](https://lopifi.com/md/glossary/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.

> “shall not exceed $5,000,000”

— [17 CFR §227.100(a)(1)](https://www.law.cornell.edu/cfr/text/17/227.100), Regulation Crowdfunding: $5 million in 12 months

> “permit a company to raise a maximum aggregate amount of $5 million through crowdfunding offerings in a 12-month period”

— [SEC, Regulation Crowdfunding](https://www.sec.gov/resources-small-businesses/exempt-offerings/regulation-crowdfunding), The SEC's page on Regulation Crowdfunding and its intermediaries

| If income or net worth is… | The investor may put in |
| --- | --- |
| Either below $124,000 | The greater of $2,500 or 5% of the greater of income or net worth |
| Both at least $124,000 | 10% of the greater of income or net worth, up to $124,000 |

Per-investor limits for non-accredited investors in any 12 months, 17 CFR §227.100(a)(2).

> “The greater of $2,500, or 5 percent of the greater of the investor's annual income or net worth, if either the investor's annual income or net worth is less than $124,000.”

— [17 CFR §227.100(a)(2)(i)](https://www.law.cornell.edu/cfr/text/17/227.100), Regulation Crowdfunding: what a non-accredited investor may put in

**Regulation Crowdfunding**
- Pro: Open to non-accredited investors
- Pro: Public marketing through the platform
- Con: Capped at $5 million in 12 months
- Con: An intermediary, its fees, and ongoing disclosure
- Con: Many small holders on the cap table
- Best for: Consumer companies with a community of customers who want to invest

**Rule 506(b)**
- Pro: No amount limit
- Pro: No intermediary needed
- Con: No general solicitation
- Con: Non-accredited investors bring disclosure duties
- Best for: Most venture rounds

## Where this page's rules come from

- [17 CFR §227.100(a)(1)](https://www.law.cornell.edu/cfr/text/17/227.100) — Regulation Crowdfunding: $5 million in 12 months (sec)
- [17 CFR §227.100(a)(2)(i)](https://www.law.cornell.edu/cfr/text/17/227.100) — Regulation Crowdfunding: what a non-accredited investor may put in (sec)
- [SEC, Regulation Crowdfunding](https://www.sec.gov/resources-small-businesses/exempt-offerings/regulation-crowdfunding) — The SEC's page on Regulation Crowdfunding and its intermediaries (sec)

- **Track:** [Cap tables & raising](https://lopifi.com/md/learn/equity)
- **Part of:** [Securities law for raising money](https://lopifi.com/md/learn/securities-law-for-startup-fundraising) — 4 min
- **Terms taught:** [Regulation Crowdfunding](https://lopifi.com/md/glossary/regulation-crowdfunding), [Accredited investor](https://lopifi.com/md/glossary/accredited-investor)
- **Previous:** [Form D and state notice filings](https://lopifi.com/md/learn/securities-law-for-startup-fundraising/form-d-and-blue-sky-filings)
- **Next:** [Rule 701 for employee equity](https://lopifi.com/md/learn/securities-law-for-startup-fundraising/rule-701-employee-equity)
- **The course:** https://lopifi.com/md/learn