Regulation CF, also known as “equity crowdfunding” is a type of offering similar to Regulation A+; allows raising funds from the public. Regulation CF allows the maximum of $1 million to be curated and companies wishing to invest must file with SEC (Security Exchange Commission) before participation.

Unlike Regulation A+ the process of getting approved is less rigorous. Such as there not being a need to have first-time users have their financial statements audited. Although, you will not be eligible to resell your share for the first 12-month period unless the shares are transferred:  

  • To the company that issued the shares
  • To an accredited investor
  • To a member of family
  • In the event you pass away or get a divorce
  • To a trust in control by you or one created for the use of another family member
  • As part of an offering registered with the SEC

Another aspect that Regulation CF covers is the time and amount an investor can input. Meaning and investor cannot contribute more than a certain amount in a 12-month period. As well as cannot input a certain percentage in regard to their own income. Due to the risk involved in crowdfunding how much you can invest in a 12-month period.

*(‘If either the annual income or the net worth of the investor is less than $100,000, the investor is limited to the greater of $2,000 or 5% of the lesser of his or her annual income or net worth. If the annual income and net worth of the investor are both greater than $100,000, the investor is limited to 10% of the lesser of his or her annual income or net worth, to a maximum of $100,000”.)

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