A few months ago, Crowdfund Capital Advisors (CCA) submitted a petition to the Securities and Exchange Commission (SEC) to increase the Reg CF [Regulation Crowdfunding] funding cap from $5 million to $20 million.
In general, industry insiders support the move, viewing it as more closely aligned with Seed-stage funding rounds in the US. At the same time, issuers often pair a Reg CF funding round with a Reg D offering to skirt the funding cap rule. Under Reg D, an issuer may raise an unlimited amount but only from Accredited Investors.
The petition is accepting public comments, and so far, a handful of responses have been received, with most voicing support for the increase.
For the Increase
Karen Kerrigan, president and CEO of the Small Business & Entrepreneurship Council, wrote in strong support. She argued the $5 million cap, set in 2020, now stops successful Main Street issuers just as growth capital matters, forces them to fragment raises or move to accredited-only rounds, and excludes the retail investors who took the earliest risk. She called $20 million modest next to Reg A Tier 2 and other exemptions at $75 million, and said existing protections would stay in place. She also backed making the Rule 12g-6 asset threshold (now $25 million), so a successful $20 million raise does not itself trigger full Exchange Act registration.
Justin Starbird, CEO of The Aebli Group, supports the $20 million cap and an inflation adjustment. His firm runs investor communications for Reg CF issuers. He said the cap is an artificial stop for capital-intensive companies that need more than $5 million to reach commercialization, and that moving off Reg CF breaks the investor community the company built.
Tom Wright, an angel investor who says he holds investments in 151 startups, asked the SEC to raise the cap so he and other angels can put more money into raises that hit the limit.
Pierce Leonard of Cornelius, North Carolina, supports the raise and indexing as both a Reg CF investor and a commercial insurance broker who has placed D&O coverage on Reg CF, Reg A, and Reg D 506(c) deals since 2020. He claims that a higher cap could grow the market he serves. His core point: the current cap does not remove risk; it pushes the strongest deals out of retail reach. He suggested the SEC consider requiring Form C disclosure of whether an issuer above $5 million carries D&O that responds to securities claims, and the limit of that coverage.
Abdul Alawiye, founder of HappeeBabyCFM, says the $5 million cap has blocked full housing SPVs for a mortgage-automation and community-development platform, forcing split offerings and excluding everyday investors. He strongly supports $20 million so a complete project can sit in one offering.
Glenn Burney, an active investor on Wefunder, StartEngine, Republic, and other portals, strongly supports the raise and indexing. He describes a two-tier outcome in which retail backers fund companies early, then lose access when those companies outgrow the cap and switch to accredited-only private rounds.
Against the Increase
Shane Liddell, CEO of Smart Crowdfunding and Crowdfund Watchdog, asked the Commission to deny the request. He argues Reg CF was built for modest community raises, not $20 million retail underwriting of institutional-scale risk, and that Reg A+, Reg D, and venture capital already cover larger needs. He cites Commission data of roughly 8,492 offerings by about 7,134 issuers since May 2016; he says median targets have stayed around $500,000–$800,000 and most campaigns still target under $1 million. He also argues a higher cap helps portal economics (a 7% fee on $20 million is $1.4 million) more than investor outcomes, and that Form C disclosure built for small raises is not automatically adequate at Series A scale. If the SEC adjusts anything, he prefers keeping $5 million, or a smaller data-justified increase, plus tighter financial-statement, use-of-proceeds, and valuation disclosure, and different treatment for first-time versus later-stage issuers.
The Commission’s current makeup is very much pro-capital formation, so an increase is not out of the question. Reg CF saw a significant jump from $1.02 million to $5 million during the last Trump administration. At the same time, recent changes to the Accredited Investor definition could moderate interest in adjusting the Reg CF funding cap, as Reg D offerings will support more retail access.