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Reg CF

REG CF, under Title III of the 2012 JOBS Act was clearly to “democratize” raising capital, especially for small businesses. This also gave retail investors the opportunity to invest directly in a private equity investments. 

The Details

Four years after the JOBS Act was signed, Title III (Regulation CF) of the JOBS Act went into effect, allowing private early-stage companies to raise money from anyone. Startups can now use equity crowdfunding to turn their customers into investors. Similar to Kickstarter and Indiegogo, Reg CF allows companies to raise funds from early adopters and the crowd. However, instead of providing investors a reward such as a t-shirt, investors receive securities, typically equity, in the startups they support. 

  • The maximum aggregate amount of funds to raise - $5 Million

  • Offerings must take place on a registered provider – broker-dealer or Reg CF funding portal. (Crowd WallStreet is a registered funding portal)

  • Investors investment limitations are based on their annual income and net worth. Checkout our FAQ.

  • Bad Actor Checks disqualifications.

  • Companies must disclosure information in filings. 

  • There are no investment limits for accredited investors investing in Reg CF offerings. 

The Process

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Preparation

A company must first draft and file a Form C with the SEC before proceeding with launching a offering. Don't worry, we will assign you an account manager that will guide you through the process.

 

Before we list your offering on our platform, your company must be approved. Once approved, we will start guiding you through the Form C. The Form C is a document the company must file with the Securities and Exchange Commission (“SEC”) which includes basic information about the company and its offering and is a condition to making a Reg CF offering available to investors. 

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Raise Capital

Once you have successfully submitted your Form C, you can not start raising capital on Crowd WallStreet. To start creating your campaign, you must first create an account in our Deal Room

The misconception about crowdfunding is believing once you launch a campaign investors will start pour money into you offering. NOT TRUE! Learn more about raising capital at our University.

Investors: Although every company that is listed on our platform goes through our due diligence process, we highly suggest you do your own due diligence before investing in any company. 

It is important to note that the SEC does not review the Form C, and therefore is not recommending and/or approving any of the securities being offered.

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Accept investments

With proper planning you should start receiving investments on the launch of your campaign.

 

On average, campaigns run for 60-90 days.  

The company is prohibited from closing on any investments until 21 days after listing their Regulation CF offering with a funding-portal.

Per regulations set forth by the SEC, each company must disclose any material changes during the time of their fundraise. Each investor should be notified and investors must re-confirm their investment within 5 business days. If an investor does not re-confirm their investment within 5 business days of a material change in the offering, their investment will be automatically canceled.

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Closing

We will work with our escrow agent to make sure the funds from escrow will be transferred to the company upon completion of the offering. 

Investments are made official when the campaign has ended. Investors will have access their summary statements and a portfolio of their investments once they have been closed.

 

Note that investors have the right to cancel their investment for any reasons up to 48 hours before a closing occurs.

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Post Campaign

Congrats! Your campaign has came to a close. However, you still have some follow ups to do. 

Under Regulation CF, companies are required to report to its shareholders on an annual basis.

In certain circumstances a company may terminate its ongoing reporting requirement if:

  1. The company becomes a fully-reporting registrant with the SEC

  2. The company has filed at least one annual report, but has no more than 300 shareholders of record

  3. The company has filed at least three annual reports, and has no more than $10 million in assets

  4. The company or another party purchases or repurchases all the securities sold in reliance on Section 4(a)(6)

  5. The company ceases to do business

Apply Now

If Reg CF is right for you, apply today!