Reg CF limits, explained for the person running the raise

A Reg CF offering can raise up to five million dollars in a rolling twelve month period, a non-accredited investor can put in a slice of their income or net worth capped at one hundred twenty four thousand dollars a year across all Reg CF offerings, and the target offering amount decides both which financial statements the raise needs and whether any money changes hands at all. Most issuers know the first number and none of the others. The others are the ones that shape the campaign, because each limit is a marketing constraint before it is a legal one: it sets the size of the retail check, the number of investors a target needs, and what the last two days of the raise are for.

At a glance

The offering limit is rarely the constraint

A company may sell up to five million dollars of securities under Reg CF in any twelve month period. Sales under other exemptions in the same window, a Reg D round for instance, do not count against it.

Five million is the number everyone quotes and almost nobody reaches. Most Reg CF raises close well under it, not because the ceiling is in the way but because the company could not generate more qualified demand at a cost that worked. That is the same argument we made about the Tier 2 cap in reg-a-plus-improvement-act-150m-cap, and it is truer here. If your plan depends on the cap, the plan is fine. If it depends on demand you have not yet proven, read reg-cf-before-reg-a-plus first.

The rolling window matters for a second raise. A company that closed a two million dollar Reg CF in March may raise only three million more under Reg CF until the following March. Companies planning back-to-back raises need the calendar in front of them.

The investor limit sets the size of the retail check

A non-accredited investor may invest, across all Reg CF offerings in a twelve month period, the greater of two thousand five hundred dollars or five percent of the greater of their annual income or net worth if either figure is under one hundred twenty four thousand dollars, and ten percent of the greater of the two if both are at or above it, capped at one hundred twenty four thousand. Accredited investors have no limit.

This is the number that most directly shapes a campaign, and the one most issuers never do the arithmetic on. The limit is per investor across every Reg CF offering they invest in that year, and the intermediary enforces it at checkout, so the check a typical retail investor can write is bounded by rule, not by enthusiasm. That bounds the average investment, and the average investment divided into the target tells you how many investors the raise needs. A two million dollar target at an average investment of a thousand dollars is two thousand completed investments. That is a campaign plan, and it should be the first number in the media budget.

Two consequences follow. First, the raise is a volume business: the funnel has to be built for thousands of small conversions, not dozens of large ones, which is what makes it consumer marketing. Second, accredited investors are the exception to all of it. They have no limit, and a meaningful share of any public audience is accredited. Give them a path through the same campaign rather than a retail checkout that stops at the cap; the structural version of that argument is in reg-a-plus-and-reg-d-at-once.

The target is a promise, not a goal

Every Reg CF offering states a target offering amount and a deadline, and the rule is all or nothing: if commitments do not reach the target by the deadline, no securities are sold, every commitment is cancelled, and every dollar goes back. The issuer may also state a maximum it will accept above the target and how oversubscriptions will be allocated, whether pro rata, first come first served, or by another disclosed method.

The temptation is to set the target at what you hope to raise. Set it instead at the smallest amount that makes the raise worth doing, because that is the only amount the rules guarantee you will have if you cross it. A missed target is not a smaller raise. It is a refund, a public data point on the intermediary's site, and a campaign budget spent for nothing. A low target with a high maximum gives the raise a floor it can clear early and a ceiling it can grow into, and clearing the target early is itself a marketing event: momentum is the most persuasive thing a live offering has.

The last 48 hours are a retention problem

An investor may cancel a commitment for any reason until forty eight hours before the offering deadline. After that the commitment stands, unless a material change reopens it, which is covered in reg-cf-forms-explained.

Most campaigns plan the final week as a closing push: last-chance email, deadline creative, a countdown. Fewer plan for the fact that until two days out, every commitment on the board is still revocable. The people who committed in week one and have heard nothing since are the ones who cancel, not out of doubt but out of drift. The closing week therefore has two audiences. New investors need urgency. Existing ones need a reason to stay, which means the updates, the milestones, and the story should keep reaching them right up to the window.

If the target is reached early, the issuer may close early, provided the offering has been open at least twenty one days, investors get notice, and the new deadline is at least five business days after that notice. The same forty eight hour cancellation right applies to the new deadline.

The target sets the financial statement tier

Which financial statements a Reg CF offering requires depends on the aggregate target offering amount, including any Reg CF offerings in the prior twelve months. At one hundred twenty four thousand dollars or less, financial statements certified by the principal executive officer plus tax return information. Above that and up to six hundred eighteen thousand, statements reviewed by an independent accountant. Above that, audited statements, except that a first-time Reg CF issuer may use reviewed statements up to one million two hundred thirty five thousand. Audited or reviewed statements may always be used in place of a lower tier if the company has them.

This is a decision made months before launch, and it is keyed to the target, not the maximum. A first-time issuer that sets a target under the audit line and a maximum well above it has chosen a lighter disclosure burden with room to oversubscribe, which is why so many first raises are structured that way. A target above the line means an audit, with the cost and the calendar that implies. Counsel and the intermediary will confirm which tier applies; the point is that the target is doing more than one job, and the tier is one of them.

The reporting tail is a function of investor count

After the raise, a Reg CF issuer files an annual report until it becomes eligible to stop, and the most common exit is having filed at least one annual report with fewer than three hundred holders of record. The full set of conditions is in reg-cf-forms-explained.

That makes investor count a reporting decision as well as a marketing one. A very low minimum investment produces a large holder count and a longer reporting obligation. Small investors are often a company's most vocal advocates, so this is not a reason to keep them out. It is a trade to make on purpose, with the minimum investment set knowing what it does downstream.

Every one of these limits is fixed by rule, and none of them is what usually decides how much a raise brings in. That is decided by whether the company can put its offering in front of enough of the right people at a cost per completed investment that works. The limits tell you the shape of the campaign you need. They do not run it.

This is general information about the limits of a securities exemption, not legal advice. Investment limits, the financial statement tier, and the terms of your offering are questions for your own securities counsel and your intermediary, and the SEC adjusts the dollar figures for inflation periodically.

FAQ

How much can you raise with Reg CF?

Up to five million dollars in a rolling twelve month period, through a single registered funding portal or broker-dealer. Only Reg CF sales count toward the limit; money raised under other exemptions in the same window does not.

How much can an investor invest in a Reg CF offering?

A non-accredited investor may invest, across all Reg CF offerings in twelve months, the greater of two thousand five hundred dollars or five percent of the greater of their annual income or net worth if either is under one hundred twenty four thousand dollars, and ten percent of the greater of the two if both are at or above it, capped at one hundred twenty four thousand. Accredited investors have no limit. The intermediary enforces the limit at checkout.

What happens if a Reg CF offering does not reach its target?

No securities are sold. Every investment commitment is cancelled and all committed funds are returned to investors. The intermediary notifies investors and directs the refunds within five business days of the deadline.

Can a Reg CF offering be oversubscribed?

Yes, if the issuer says so in its Form C. It must disclose whether it will accept investments above the target, the maximum it will accept, and how oversubscriptions will be allocated, such as pro rata or first come first served. The maximum cannot exceed the five million dollar twelve month limit.

Do Reg CF offerings require audited financial statements?

It depends on the aggregate target offering amount over twelve months. Up to one hundred twenty four thousand dollars, officer-certified statements and tax return information; up to six hundred eighteen thousand, reviewed statements; above that, audited statements, except that a first-time Reg CF issuer may use reviewed statements up to one million two hundred thirty five thousand.

Can an investor cancel a Reg CF investment?

Yes, for any reason, until forty eight hours before the offering deadline. After that the commitment stands unless the issuer makes a material change to the offering, which requires every investor to reconfirm within five business days or be cancelled and refunded.