Crowdfunding has been all of the rage over the last year with the implementation of Regulation CF (Title III of the JOBS Act), Regulation A+ (Title IV of the JOBS Act) and the release of the prohibition on general solicitation in certain Regulation D offerings (Title II of the JOBS Act).  Regulation A+ and Regulation CF have essentially democratized fund raising by giving non-accredited investors an opportunity to invest in private companies. We have yet to see the success of Regulation CF as it was implemented last month, however, portals such as StartEngine ( have had great success raising funds under Regulation A+.  For example, Elio Motors closed on nearly $17 million in funding through StartEngine’s portal.

Regulation CF (“Regulation Crowd Funding”) and Regulation A+ have varying investor requirements, reporting requirements, filing burdens and advertising rules.  The table below outlines the major differences between Regulation CF offerings and the two types of Regulation A+ offerings (Tier 1 and Tier 2).  It also compares them with Rule 506 under Regulation D, which permits general solicitation in private placements if sales are made only to accredited investors. 


Feature Regulation CF Reg A+

 (Tier 1)*

Reg A+

 (Tier 2)*

Reg D

Rule 506

Offering limit (per 12 months) $1 million $20 million $50 million Unlimited  


Number of Investors Unlimited Unlimited




Unlimited accredited; 35 non-accredited
Investment Per Investor Annual income or net worth less than $100K, 5% of lesser of net worth or annual income


Annual income and net worth $100K+, 10% of lesser of net worth or annual income




Unaccredited investors, 10% of greater of annual income or net worth


Accredited investors, no limit





SEC Approval OR Filing
Basic  business disclosure filing with SEC on Form CF

No SEC approval required

Robust business disclosure filing with SEC on Form 1A
SEC approval required
Robust business disclosure filing with SEC on Form 1A
SEC approval required
Form D filed with SEC with no business disclosure
No SEC approval required
Financial Statement Requirement Officer certification if raising $100,000 or less

Reviewed financial statements if raising $100K - $500,000

Audited financial statements if raising $500,000-$1M, however, first time CF issuers may use reviewed financial statements.
Unaudited financial statements permitted Audited financial statements required None (if only accredited


Intermediary Required Broker/dealer or funding portal No






Subject to ongoing SEC reporting  Annual report with financial statements certified by officer Form 1-Z report within 30 calendar days after termination or completion of offering Annual reports with audited financial statements; semi-annual reports with unaudited financial statements No


State Filing None Extensive Generally, no Minimal


Advertising and general solicitation Permitted after SEC filing “Testing
 the Waters” permitted 
before and after SEC filing
 the Waters” permitted 
before and after SEC filing
If sales only to accredited investors
Estimated filing costs, legal fees and accounting fees for initial filing $8,000 - $12,000 $80,000- $120,000 $50,000- $80,000 $10,000 - $40,000


Guest Written By: Jeffrey Marks, J.D. of Alliance Legal Partners

jeffrey marks crowdfunding expertAbout Us

Alliance Legal Partners has over 20 years of experience guiding clients through the formation, operation, financing, growth and sale of their businesses. 

We serve as outside general counsel to our clients and handle their day-to-day corporate and contract matters.  We offer a cost effective solution for a company or individual who appreciates the value of big firm expertise, but is looking for small firm attention and a reasonable fee structure.  

Visit our website for more details.