Reg D & Compliance
Regulation Crowdfunding (Reg CF): Raising Online, Legally
Regulation Crowdfunding — Reg CF — is the SEC exemption that lets a company raise a limited amount of money from the general public, including non-accredited investors, through a registered online platform. For real estate sponsors, it's the exemption that makes true 'anyone can invest' crowdfunding legal — but it comes with a funding cap, a mandatory intermediary, and disclosure obligations that make it a very different animal from a Reg D 506 raise.
By One Million Media4 min read
This guide explains Reg CF for sponsors: what it is, how it differs from Reg D and Reg A+, the key limits, and when raising under Regulation Crowdfunding actually makes sense for a deal. It's educational, not legal advice.
What is Regulation Crowdfunding?
Regulation Crowdfunding, created under the JOBS Act, allows a company to raise capital from the public — accredited and non-accredited investors alike — by selling securities through an SEC-registered funding portal or broker-dealer. The defining features are that it opens the raise to ordinary investors and that it must run through a registered intermediary; you can't conduct a Reg CF raise directly off your own website.
It exists to democratize access to private investments. For a sponsor, that's both the appeal (a huge pool of potential small investors) and the constraint (caps and disclosure designed to protect those investors).
Reg CF vs. Reg D vs. Reg A+
These three exemptions sit on a spectrum from private-and-flexible to public-and-regulated:
| Reg D 506(c) | Reg CF | Reg A+ | |
|---|---|---|---|
| Who can invest | Accredited only (verified) | Anyone (with investment limits) | Anyone |
| Raise cap | Unlimited | Capped (a few million / 12 months) | Up to $75M / 12 months (Tier 2) |
| Intermediary | None required | Required (registered portal/BD) | None required, but SEC-qualified |
| SEC filing | Form D notice | Form C + ongoing reports | Offering circular, SEC-qualified |
| Cost / complexity | Low–moderate | Moderate | High |
Reg D 506(c) lets you raise unlimited money but only from verified accredited investors. Reg CF lets you take money from everyone but caps how much you can raise and requires a portal. Reg A+ is the 'mini-IPO' — public investors and large raises, but with the cost and SEC qualification to match. The right choice depends on your investor base, raise size, and tolerance for cost and disclosure.
The key limits and requirements
Reg CF's guardrails are what make it suitable for some raises and impractical for others:
- Annual raise cap: an issuer can raise only a limited amount via Reg CF in a 12-month period (in the low millions) — too small for many institutional-scale deals.
- Investor limits: non-accredited investors face caps on how much they can invest based on income and net worth, enforced by the portal.
- Mandatory intermediary: the offering must run through an SEC-registered funding portal or broker-dealer, which charges fees.
- Disclosure: you file a Form C with financial disclosures (the depth scales with raise size) and have ongoing annual reporting obligations.
- Public marketing: you can advertise the offering, but with rules about directing investors to the portal.
When Reg CF fits a real estate raise
Reg CF is a specialized tool, not a default. It tends to fit when:
- You want to raise from a broad base of smaller, non-accredited investors — perhaps a community of followers or a brand-aligned audience.
- The raise size fits comfortably under the annual cap.
- You're comfortable running through a portal and absorbing its fees and the disclosure burden.
- Building a public 'investor brand' across many small investors is itself a goal.
For most sponsors raising $2M+ from a smaller number of accredited investors, Reg D 506(c) is the more practical exemption — unlimited raise size, no portal, lighter ongoing burden, and the ability to verify and build relationships with high-capacity investors. Reg CF is worth understanding, and occasionally the right call, but it's not the standard path for a typical accredited-investor raise. Decide with securities counsel.
Frequently asked questions
What is Regulation Crowdfunding (Reg CF)?
Regulation Crowdfunding is an SEC exemption, created under the JOBS Act, that lets a company raise a limited amount of capital from the general public — including non-accredited investors — by selling securities through a registered online funding portal or broker-dealer. It opens private investing to ordinary investors but requires an intermediary and caps the raise size.
What's the difference between Reg CF and Reg D?
Reg D 506(c) lets you raise an unlimited amount but only from verified accredited investors, with no required intermediary. Reg CF lets you raise from anyone, including non-accredited investors, but caps the total raise (in the low millions per 12 months), requires a registered portal, and imposes more disclosure and ongoing reporting. Reg D is the more common path for larger accredited-investor raises.
Can non-accredited investors invest through Reg CF?
Yes — that's a defining feature. Reg CF allows non-accredited investors to participate, though they face limits on how much they can invest based on their income and net worth, which the funding portal enforces. This is the main practical difference from a Reg D 506 offering, which is limited to (or, for 506(c), requires verified) accredited investors.
Do I need a platform to raise under Reg CF?
Yes. A Reg CF offering must be conducted through an SEC-registered funding portal or broker-dealer — you cannot run it directly off your own website. The intermediary handles investor verification of limits, hosts the offering, and charges fees, which is part of the cost-benefit calculation versus a Reg D raise.
Is Reg CF a good fit for a real estate syndication?
Sometimes. It fits when you want to raise from a broad base of smaller, non-accredited investors and the raise size fits under the annual cap, and when building a public investor brand is a goal. For most sponsors raising several million from a smaller number of accredited investors, Reg D 506(c) is more practical. The decision should be made with securities counsel.
Keep reading
This article is for educational purposes only and is not legal, investment, tax, or securities advice. Securities offerings are regulated; always work with your securities attorney to structure and run your offering. One Million Media is a marketing and lead-generation provider — not a broker-dealer, investment adviser, or law firm.
