Crowdfund Capital Advisors (CCA) has distributed an end-of-year update on activity in securities crowdfunding. More specifically, securities sold under Reg CF. According to CCA, a total of $375 million was raised during 2024 – the third year of consecutive decline for this sector of capital formation.
It is important to note that venture capital funding has experienced several rocky years due to a challenging economy and high interest rates. This could reverse in 2025 as rates decline and market activity picks back up, partly due to the incoming Trump administration, which should be more supportive of capital formation.
The report highlights the common practice of issuers selling securities to retail investors under Reg CF while pairing it with a Reg D offering, which must be sold to Accredited Investors. Issuers may raise up to $5 million using Reg CF but can raise an unlimited amount using Reg D. When combining the Reg D funding with a Reg CF offering, the amount raised for firms jumps to $547 million.
The report states parallel offerings gained significant traction.
“Without these parallel offerings, however, the year would have marked a continuation of the decline in overall RegCF commitments, which have dropped for three consecutive years—from a high of $554 million in 2021 to just $375 million in 2024. The inclusion of these parallel amounts has allowed the industry to show cumulative growth (RegCF combined with 506(c)) over the past three years, signaling a maturing ecosystem where issuers strategically use RegCF to target a diverse investor base and optimize their capital-raising efforts.”
CCA also points out that more mature firms are using Reg CF, as most (71.2%) are now post-revenue.
Median valuations are also on the rise due in part to the greater maturity of issuers as well as the impact of inflation. CCA states that pre-revenue startups achieved a median valuation of $10 million, double the $5 million benchmark from 2016. Post-revenue issuers achieved a median valuation of $20 million.
Higher valuations are a double-edged sword. Overly aggressive valuations can dim investor interest or lead to a down round (or no future funding). Sherwood Neiss of CCA says, “Crowdfunding gives startups a fighting chance, but founders must balance ambition with practicality. Responsible valuations ensure that both investors and issuers build sustainable relationships for long-term success.”
Access to capital is key to supporting an innovation-driven economy. Capitalism has allowed the US economy to create the most successful firms in the world, driving economic growth and prosperity. Reg CF is playing a role in this economic miracle by supporting around 110,976 jobs in 2024. While many issuers raise money via equity, preferred shares, or SAFEs, debt offerings, and Rev Share deals are on the rise. Debt and revenue-share offerings accounted for 32% of 2024’s total.
CCA believes that Reg CF companies have reinvested approximately $26 billion into the economy. That is significant.
With Congress and the Executive controlled by Republicans, we anticipate improvements to the exempt offering ecosystem that will help boost online capital formation in the coming years.
Niess states:
“Crowdfunding isn’t just about raising money—it’s about creating ecosystems of innovation, jobs, and intergenerational wealth. By empowering everyday investors to become owners, we’re fundamentally reshaping the economy and ensuring opportunity flows to every corner of the nation.”