Reg CF: 44 FINRA Approved Crowdfunding Portals and Counting

In June, we updated readers on the number of FINRA approved Reg CF portals. At that time the count stood at 41 regulated crowdfunding platforms. As of today (September 21, 2018), that number has now increased to 44 FINRA approved Reg CF platforms as three new platforms have been added to the group.

As for portals that have exited this sector of online capital formation, that number remains the same at four (Crowdboarders, DreamFunded, Neighbor Capital and UFP).

So who are the new additions to the smallest form of investment crowdfunding? They are as follows:

EnrichHER Funding is a platform that “unites founders and funders who share a vision for sustainable women-led ventures.” EnrichHER was founded by Roshawnna Novellus earlier this year to empower female founders with the capital needed to build their businesses. As of yet, there are no offerings on the platform.

MiTech, a Public Benefit Corporation, is operating the site Crowdfund Main Street. The California based platform currently has five offerings listed on the site. None of these offerings have yet met their minimum funding goal.

SeedingVR is a vertical crowdfunding platform as it is focusing on one sector of industry: Virtual Reality. The platform explains:

“We are the only equity crowdfunding portal specific to the virtual reality industry and offer exclusive access to some of the stealthiest VR tech. And yes we know virtual reality, mixed reality and augmented reality are technically different. But for simplicity sake we put them into the same bucket and just call in VR.”

Currently, there are no VR offerings listed.

As we recently reported, since the Reg CF industry went live in 2016 approximately $135.3 million has been raised under this securities exemption. A very small sum in the broader ecosystem of early stage funding. Most of the money raised to date has been with the assistance of just a handful of platforms.

Industry participants, along with this publication, are hopeful that policymakers will step up and remove some of the shortcomings intrinsic to the exemption to help foster sector growth and provide a more effective path for early stage companies to raise growth capital. While regulators, elected officials, and other prognosticators expected rampant fraud under Reg CF – the opposite has been true. The exemption was so strict it completely undermined utilization.

In July, a letter was forwarded to Securities and Exchange Commission (SEC) Chairman Jay Clayton demanding action by the regulator to fix one aspect of Reg CF. A prominent group of Fintech leaders demanded the Commission to increase Reg CF from the current $1.07 million cap to $20 million.

It was pointed out that in Europe many countries now allow issuers to raise up to €8 million (USD $9.4 million) on crowdfunding platforms. There are some advocating to push that amount higher as crowdfunding is viewed as an efficient vehicle to help fuel startups. There is also legislation being crafted to enable issuers to more easily operate on a pan-European level. This new legislation may also include rules to incorporate initial coin offerings (ICOs) as an option for issuers beyond more standard debt and equity offerings.

In the end, policymakers should focus on making Reg CF the exemption of choice for the very best firms. Today, the most promising startups use Reg D as the compliance demands are less stringent and thus presents a far lower cost for companies raising capital. Additionally, this means only VCs and the very wealthy have access to these investment opportunities and smaller investors are cut off from the opportunity.

While the changes needed to improve Reg CF may be relatively simple to fathom there is little political will to make these improvements. Either due to benign neglect, ignorance, or opposition, access to capital for smaller and early stage firms remains a problematic policy issue. Perhaps the electorate should demand business / entrepreneurship experience from our elected officials?

Company NameURLCityState
Buy the BlockNADenverCO
CollectiveSun, LLCwww.collectivesun.comSan DiegoCA
Crowd Ignitiionwww.crowdignitiion.comNew YorkNY
EnergyFunders Marketplace
EnrichHER Funding, LLC
Equifund Crowd Funding Portal Inc.www.equifundcfp.comKanataON
EquityBenderwww.equitybender.comCoronoa Del MarCA
First Democracy VC (Indiegogo)www.microventures.comAustinTX
Flashfunders Funding Portalwww.flashfunders.comSherman OaksCA
Funding Wonder Crowdwww.fundingwonder.comMiamiFL
Fundpasswww.custvestor.comSan FranciscoCA
Good Capital VenturesNAMassillonOH
GrowthFountain Capitalwww.growthfountain.comNew YorkNY
Honeycomb Portalwww.honeycombcredit.comPittsburghPA
HycrowdNAJersey CityNJ
Indie Crowd Funderwww.indiecrowdfunder.comLos AngelesCA
Jumpstart Microwww.jumpstartmicro.comBedfordMA
Ksdaqwww.mrcrowd.comLos AngelesCA
Merging Traffic Portal llcwww.mergingtrafficportal.comOrlandoFL
MiTec, PBC (Crowdfund Main Street)
NetCapital Funding Portalwww.netcapital.comLewesDE
NextSeed USwww.nextseed.comHoustonTX
NSSC Funding Portal (SmallChange)www.smallchange.comPittsburghPA
OpenDeal (Republic)www.republic.comNew YorkNY
Razitallwww.razitall.comBasking RidgeNJ
SeedingVR, LLC
SI Portal (SeedInvest)www.seedinvest.comNew YorkNY
Silicon Prairie Holdings, Inc. PaulMN
Slice Capitalwwww.slice.capitalExtonPA
Sprowtt Crowdfundingwww.sprowttcf.comTampaFL
Stampede cfp llcNAHonoluluHI
StartEngine Capitalwww.startengine.comLos AngelesLA
StartWisewww.startwise.comSan CarlosCA
STL Critical Technologies JV I, LLC (nvested)www.nvstedwithus.comSt. LouisMO
Thrivera Ventures Fundwww.wunderfund.coCincinnatiOH
Title3Funds.comwww.title3funds.comIrvineCA www.fundanna.comChicagoIL
Venture Capital 500www.venturecapital500.comJacksonvilleFL
Wefunder Portalwww.wefunder.comSan FranciscoCA
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