Fri, 18 March 2022
What Is Reg CF Crowdfunding?
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.
Reg CF refers to the SEC regulation for equity crowdfunding.
This form of crowdfunding offers the investor an equity stake in the company.
By contrast, rewards platforms provide the product to those who provide funding.
In equity crowdfunding, the investor must hold the stock for at least twelve months.
Anyone eighteen years of age or older can invest.
By contrast, angel and venture capital fundraises use Reg D which is only for accredited investors.
Equity crowdfunding offers access to shares in companies for a relatively small investment amount.
This gives the investor the ability to invest in more companies.
You must complete a Form C for regulatory purposes before launching a campaign.
Most Reg CF campaigns cost anywhere between $10K and $50K for marketing.
It requires a budget for social media ad spend which is typically around 10%-15% of the fundraise.
You can run the raise on a licensed equity crowdfunding portal or on your own website.
You can raise up to $5M.
Consider equity crowdfunding for your fundraise as it gives you access to a new investor base.
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