Regulation CF, or Reg CF, is the smallest of the securities crowdfunding exemptions, as issuers may raise up to $5 million. Still, the exemption has helped build an industry in which smaller firms can access capital through a regulated securities offering open to anyone, not just Accredited Investors.
Reg CF has had a bumpy tenure. Initially, businesses could raise only $1 million, which was far too little and highlighted the lack of sophistication among the policymakers who enacted the law. Later, the exemption was significantly increased to $5 million, but many in the industry believe this amount remains too low, as Seed funding rounds can easily exceed it. Some prefer a $20 million funding cap to create a better tiered process for growth firms.
Kingscrowd, a data firm that tracks Reg CF offerings, recently published an update on the exemption that showed a worrisome decline in May. According to their numbers, this sector of finance generated the following data points:
- In May 2026, issuers raised a total of $9.7 million under Reg CF. This is a dramatic 59% decline from April, when $23.6 million was raised. In May 2025, issuers raised $20.9 million (53.9% difference).
- The average amount raised during May was just $25,100. In April, firms raised an average of $59,500. In May 2025, issuers raised an average of $49,300 so a 47% decline.
- The average Reg CF issuer valuation in May 2026 was $36.4 million, a 5% drop from April at $38.3 mllion and a 10% increase versus May 2025 at $32.9 million
- Total estimated Reg CF issuer valuations were $13.5 billion in May 2026, compared to $15.2 billion in April 2026 and $14 billion in May 2025.
- In total, during May, there were 370 active offerings under Reg CF, down 6.6% from April 2026 and 12.9% year over year from May 2025, when 425 issuers were active.
The top funding platforms have remained pretty consistent over the months, with Republic, Wefunder, StartEngine, and DealMaker accounting for 94.1% of funds raised in May. These platforms also offer support for other exemptions, so Reg CF is not necessarily indicative of their operations.
So what is driving Reg CF activity lower? May could just be anomalous; let’s see what June brings.
Also, so much investor interest has been focused on AI and the hot IPO market. Issuers may not want to compete with these issuers.
Still, policymakers should recognize the benefits of Reg CF and work to improve the online capital-formation ecosystem, enabling issuers to access capital and investors to participate in private securities in firms they believe will succeed.
