Regulation Crowdfunding, or Reg CF, is a securities exemption that allows firms to raise up to $5 million in an online offering. While Reg D 506c and Reg A+ both allow online securities offerings, they are difficult to track due to the characteristics of the exemptions. Reg CF’s filing requirements make it easier to gauge activity, and yesterday, CI received a report that indicates a recent decline in total investments using the exemption.
According to Crowdfund Capital Advisors (CCA):
“From March 10 through April 9 of this year, total investments through RegCF dropped to $57.48 million—a 24% decline compared to the same period in 2024. The number of checks written fell by nearly 15%, and new offerings launched dropped by more than 40%.”
This pullback is said to be due to hesitancy from investors while issuers have become more cautious too.
Average funding rounds have also declined dramatically from $1.2 million last year to around $720,000 in 2025.
CCA founder Sherwood Neiss says:
“We’re seeing the first real signs of pullback in what has otherwise been a resilient funding ecosystem. The numbers tell a story not of panic, but of pause. Investors and issuers alike are waiting for clarity—on costs, on policy, and on risk.”
So, what is the cause of this decline? Neiss believes it may be due to a “ripple effect of tariffs” and the complex environment of doing business in a world that lacks clarity and thus increased risk.
“Tariffs may help some sectors, but they’re also putting early-stage companies under pressure at the exact moment they need capital the most,” Neiss believes.
Startups don’t yet have the scale to battle these types of shocks which may end up harming companies and associated jobs.
While one month does not necessarily indicate a trend, venture markets in general have been slow in recent years. This has been reflected by the online capital formation sector.
At the same time, policymakers have the opportunity to improve funding ecosystems. With the Republicans in control of Congress as well as the White House, supportive legislation that enables access to capital and access to opportunity should easily be signed into law. The past four years saw a Congress and White House that were anti-capital formation, focusing heavily on investor protection and social issues.
Neiss views Reg CF as a “canary in a coal mine,” and if policy pressures continue, the risk could be a slowdown in job creation, economic activity, and an erosion of the innovation pipeline. Neiss says that, “Tariffs may be aimed at global rivals. But their unintended victim may be Main Street.”
For now, President Trump has hit the pause button on Tariffs, but markets continue to indicate that questions remain about the eventual outcome of tariff negotiations and policy changes that may impact the economy.