Where ordinary people fund extraordinary startups

Regulation Crowdfunding provides a framework for [registered] funding portals to operate an online platform for businesses to offer and sell securities in reliance on Section 4(a)(6) of the JOBS Act. Before this, it was difficult for private businesses to sell securities to the public. The JOBS Act allows private businesses to sell securities to non-accredited investors (not just investors with a certain level of income and net worth).

Assessing an investment requires thorough due diligence so that an investor can make a fully informed decision. Each investor is responsible for conducting their own independent review of all offering documents and completing their own independent due diligence.

Experienced investors typically evaluate a range of key factors, including:

- Backgrounds of the management team
- Degree of differentiation and defensibility
- The business model
- The target market
- The competitive landscape
- Historical financial performance
- Forward-looking financial projections
- Unit economics
- The capitalization table
- Intended use of proceeds
- Legal considerations

In general, investors seek opportunities in either established or emerging sectors that demonstrate clear growth potential over a defined period, along with a committed, skilled team and observable momentum.

If the process moves forward to the next stage, it is important to understand the terms governing how a potential investment will be structured.

Key terms of an equity investment include:

- The minimum and maximum amount the company aims to raise
- Valuation
- Type of security being offered
- Voting rights
- Anti-dilution provisions and registration rights
- Dividends
- Liquidation preference
- Conversion rights
- Any additional offering terms

Under Regulation Crowdfunding (Reg CF) under the JOBS Act, both accredited and non-accredited investors can participate, but their investment limits depend on their income and net worth.

Over a rolling 12-month period, an individual may invest across all Reg CF crowdfunding offerings subject to the following caps:

- If either annual income or net worth is less than $124,000, the investor may invest the greater of $2,500 or 5% of the greater of their annual income or net worth.
- If both annual income and net worth are equal to or exceed $124,000, the investor may invest up to 10% of the greater of their annual income or net worth.

In all cases, the total amount an individual can invest across all crowdfunding offerings in any 12-month period is capped at $124,000.

The rules require that we establish a limit to your investment based on a net worth calculation. Calculating net worth involves adding up all your assets and subtracting all your liabilities. The resulting sum is your net worth.


For purposes of Reg. CF, the value of your primary residence is not included in your net worth calculation. In addition, any mortgage or other loan on your home does not count as a liability up to the fair market value of your home. If the loan is for more than the fair market value of your home (i.e., if your mortgage is underwater), then the loan amount that is over the fair market value counts as a liability under the net worth test.

Reg. CF is a securities-based crowdfunding method that allows businesses to sell equity or debt to investors through an online platform. The process is regulated by the Securities and Exchange Commission (SEC), which means there are certain rules and restrictions that must be followed. While Reg CF can be a great way to raise money for your business, it’s important to understand the pros and cons before you decide if it’s right for you.

One of the biggest advantages of Reg CF funding is that it allows startups to access a wider pool of potential investors. In the past, only accredited investors (those with a net worth of $1M or more) could invest in private companies. But with Reg CF, anyone can invest – regardless of their net worth. This means that you can reach a larger audience of people who are interested in supporting your business. n the event of a successful raise, the thousands of new investors you acquire become your ambassadors: they invested in the business and want it to succeed. Oftentimes, they are more likely to recommend your product or service to others.


Another benefit of Reg CF is that it’s relatively easy to set up a campaign. Unlike other crowdfunding platforms like Kickstarter, there’s no need to create products or perks for your investors. And unlike traditional equity funding, you don’t have to meet all your potential investors. All you need is a good business plan and EquityCF to get started. Businesses can raise up to $5 million through Reg CF campaigns


Limits. In a year, U.S. businesses may only raise up to $5 million, and you can close your round even if you do not meet your maximum funding objective, as long as you achieve a stated minimum funding goal.

Reg CF can be a great way to raise money for your business – if it’s done right. Reg CF is a securities-based crowdfunding method, there are certain rules and regulations that must be followed. This can be confusing and time-consuming for entrepreneurs who are new to the process, which is why EquityCF provides full launch support for clients who want extra support for all pre-launch requirements, including legal documents.


With a little planning and preparation, you can raise the money you need to take your business to the next level.

Apply to Launch a Reg CF Offering

Start by completing an application with EquityCF. We’ll ask for basic information about your business, project, and the type of offering you plan to present to investors. We strongly encourage you to provide as much detail as possible during this stage, including your website URL, business plan, pitch deck, Google Docs, and any other supporting materials. Applications submitted without a developed website and business plan will not be reviewed.

Once submitted, our team will review your application within one week and notify you of its approval status.

Complete Regulatory Requirements

If your application is approved, you’ll receive a follow-up email outlining the required documents and project details needed to proceed. This email will include a link to begin the project creation process, along with helpful guides to support you through setup.

Prepare SEC Filings

We’ll provide instructions for obtaining a filer CIK number and confirmation code, which are required to submit your Form C to the SEC/FINRA.

Build Your Campaign

Complete all required sections of your offering page within the EquityCF platform. Detailed instructions will be available to guide you through each requirement. Once your page is finalized, submit it for review. Our team will conduct a comprehensive compliance check to ensure all regulatory and platform requirements are met.

Final Review and Pre-Launch

After the review is complete, we will begin the submission process with FINRA. Your Form C and supporting documentation will be reviewed at this stage. Please remain responsive, as we may request additional information or clarification. Processing may take several days depending on regulatory review timelines.

Final Setup and Launch

The last step before going live is setting up your escrow account. Once your project has been reviewed, you will see an “Add Associated Entities” option appear within your dashboard. Complete all required follow-up steps to finalize your offering setup.

After all requirements are completed and escrow is approved, your offering will move into a “Running” state and your campaign will be live on EquityCF.