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Glossary

Regulation Crowdfunding (Reg CF)

Definition of Regulation Crowdfunding, the size and investor limits it carries, how an issuer may advertise a Reg CF offering, and what that means for the marketing around a raise.

Regulation Crowdfunding, usually shortened to Reg CF, is the United States exemption that lets a company sell securities to the general public online through a single registered intermediary. It was created by Title III of the JOBS Act, took effect in 2016, and is codified at 17 CFR Part 227. It is one of the two exemptions most equity-crowdfunding raises run on; the other is Regulation A+.

What the exemption allows

  • A company may raise up to $5 million in a rolling twelve-month period. The ceiling is adjusted for inflation periodically.
  • The offering must be conducted through one intermediary, either a funding portal registered with the SEC and FINRA or a registered broker-dealer. The company may not run the transaction itself.
  • The company files a Form C with the SEC before the offering opens, and a Form C-AR annually while it has Reg CF securities outstanding.
  • Non-accredited investors are limited in how much they may invest across all Reg CF offerings in a twelve-month period, calculated from their annual income and net worth. Accredited investors have had no such limit since 2021.
  • Securities bought in a Reg CF offering generally may not be resold for one year, with narrow exceptions.

Advertising a Reg CF offering

The advertising rule is the one that most often surprises companies planning a campaign. Under Rule 204, an issuer may not advertise the terms of the offering except in a brief notice that contains only specified facts and directs the reader to the intermediary's platform. The terms are the amount and type of securities offered, the price, the closing date, and similar particulars.

Two things remain broadly available:

  • Communications that do not reference the terms. A company may market itself, its product, and its story without limit, as it would at any other time.
  • Communications through the intermediary's own channels. The issuer may discuss the offering there, identified as the issuer.

Before the Form C is filed, testing-the-waters communications are permitted under a separate rule, which is how most raises build a reservation list ahead of launch.

Why it matters to marketing

The rule shapes the creative rather than preventing it. Most of a Reg CF campaign's paid media, email, and social output is brand and product communication that points to the offering page, with terms-bearing notices used deliberately and formatted to the rule. A raise planned without that distinction in mind usually has to rewrite its assets after counsel reviews them.

This page is general information about a securities exemption, not legal advice. What any particular company may say is a question for its own securities counsel and its intermediary.

Topics:glossarycrowdfundingregulation

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