Updated October 1, 2026.
Crowdfunding or online capital formation — also called investment crowdfunding, securities crowdfunding, crowdinvesting, crowdlending, equity crowdfunding, or a security token offering — is the collective effort of individuals who pool capital, usually online, to fund a business or project. In this guide, the term means an online securities offering. It is not a donation or rewards campaign. Marketplace lending sits alongside it when a platform combines institutional money with smaller investors.
The preferred use on this site is online capital formation: a securities issuer raising money from investors through an intermediary, under a specific exemption from full registration.
The United States
Online securities crowdfunding in the United States rests on the JOBS Act of 2012. Three exemptions do most of the work. A short primer is here: What is the JOBS Act?
Title II — Regulation D, Rule 506(c)
Title II lifted the old ban on general solicitation for certain private offerings. Under Rule 506(c), an issuer may advertise an offering to the public, including on the internet, but every purchaser must be an accredited investor and the issuer must take reasonable steps to verify that status. There is no federal offering cap. Background: SEC fact sheet on general solicitation under Title II.
Rule 506(b) still exists. It allows up to 35 non-accredited investors, but the issuer may not generally solicit. Most online “accredited crowdfunding” runs on 506(c).
Title III — Regulation Crowdfunding (Reg CF)
Reg CF, live since May 16, 2016, is the exemption that lets a company sell securities to anyone, accredited or not, through a FINRA-registered funding portal or a broker-dealer. Final 2015 rules: Final crowdfunding rules under Title III. The original Federal Register text is here. The 2020 amendments that set the current caps are covered in The SEC updates Reg CF, Reg A+ and more.
Current limits, under 17 CFR 227.100 as amended in 2021 and inflation-adjusted in 2022:
- Issuer cap: $5 million in a rolling 12-month period. The SEC staff confirmed in February 2026 that the lookback runs from the date of each closing, not a fixed calendar year. See SEC updates crowdfunding guidance on platform switches, caps and issuer filings.
- Non-accredited investor cap: if either annual income or net worth is under $124,000, the greater of $2,500 or 5 percent of the greater of the two. If both are $124,000 or more, 10 percent of the greater of the two, capped at $124,000. Accredited investors are not subject to this limit. “Annual income” is a calendar year.
- Intermediary: the offering must run on a registered funding portal or broker-dealer. FINRA-regulated funding portals were hovering around 70 in September 2026. Reg CF: FINRA regulated funding portals hover around 70.
- Resale: securities are restricted for one year, with statutory exceptions.
- Other 2021 changes still in force: testing the waters is permitted, and crowdfunding vehicles (SPVs) are allowed.
Through June 30, 2026, SEC data showed 9,851 Reg CF offerings filed since 2016 and about $1.64 billion in reported proceeds. Industry tracking put H1 2026 Reg CF volume at $139.5 million, down from the prior-year half.
The $5 million cap has not changed. In January 2026 a petition asked the Commission to raise it to $20 million. In July the SEC Small Business Forum recommended the same figure, with inflation indexing. Those are recommendations and a petition, not a rule. Coverage: petition to raise the Reg CF cap to $20 million and Small Business Forum recommendations. A policy note on what else could change is here.
Title IV — Regulation A (Reg A+)
Regulation A is the larger public-style exemption, sometimes called a mini-IPO. The offering statement must be qualified by the SEC before sales. Current tiers, unchanged since the 2020 amendments:
- Tier 1: up to $20 million in 12 months, including no more than $6 million by affiliate selling securityholders. State qualification still applies. No federal investment limits. No ongoing reporting beyond a final Form 1-Z.
- Tier 2: up to $75 million in 12 months, including no more than $22.5 million by affiliate selling securityholders. State review is preempted. Non-accredited investors are limited to 10 percent of the greater of annual income or net worth, unless the securities will be listed on a national exchange. Ongoing reports: Form 1-K, Form 1-SA, and Form 1-U.
Related page: Reg A+ investment crowdfunding.
Intrastate offerings
Rule 147 and Rule 147A still allow an offering confined to a single state, and many states keep their own crowdfunding statutes. Those regimes matter less than they did before the Reg CF cap rose to $5 million, but they remain available. A 2016 survey is here; check the current state statute before relying on it.
What is pending, not law
- A Reg CF cap of $20 million has been requested. It is not in force.
- In August 2026 the SEC proposed Regulation Crypto Asset, modeled in part on Reg CF and Reg A, with a startup exemption of up to $5 million over four years and a fundraising exemption of up to $75 million. Proposal only. Comparison to Reg A and Reg CF.
- On October 1, 2026 the SEC proposed an exam-based path to accredited-investor status, alongside the existing wealth and license tests. Proposal only.
European Union
The European Crowdfunding Service Providers Regulation (Regulation (EU) 2020/1503) is the single rulebook for investment-based and lending-based crowdfunding to businesses. It has applied in the EU since November 10, 2021, and in the EEA, including Liechtenstein, since August 1, 2026.
- A project owner may raise up to €5 million in a rolling 12-month period across crowdfunding offers and certain other prospectus-exempt public offers. Above that, the offer leaves the ECSP regime.
- Platforms need an ECSP authorization. Minimum capital is €25,000, or one quarter of the prior year’s fixed overheads, whichever is higher.
- Authorization passports across member states.
- Each offer needs a Key Investment Information Sheet.
- Investors are split into sophisticated and non-sophisticated, with a knowledge test and loss-reflection period for the latter.
The 2020 approval is covered in European Union approves new crowdfunding rules. The €5 million cap is still the law. Industry groups expect it to be revisited; it has not been raised.
United Kingdom
The UK no longer uses the EU crowdfunding regulation. On January 19, 2026, the Public Offers and Admissions to Trading Regulations took effect, with final platform rules in FCA Policy Statement PS25/10.
- Offers below £5 million can still rely on existing exemptions. That is where most seed and Series A crowdfunding sits.
- An offer of £5 million or more to a broad investor base must run through an FCA-authorized Public Offer Platform, unless another exemption applies. A POP can facilitate a large off-market primary offer without a full prospectus.
- Financial-promotion rules for high-risk investments, tightened in PS22/10, still apply. Risk warnings have been in force since December 2022.
- SEIS and EIS tax reliefs remain separate from the platform rules and still shape UK equity crowdfunding.
Older FCA reviews from 2016 are historical. The operative regime is the POP framework.
Other markets
These notes are for orientation, not a compliance memo. Local counsel still governs.
- Canada: prospectus exemptions and crowdfunding blanket orders differ by province. The startup crowdfunding exemption used in several jurisdictions is separate from the U.S. Reg CF model.
- Singapore: the Monetary Authority of Singapore regulates securities crowdfunding under the Securities and Futures Act. Retail offers generally need a prospectus unless an exemption applies. Licensed intermediaries, not a standalone “crowdfunding license,” are the usual path.
- Malaysia: the Securities Commission recognizes equity crowdfunding and peer-to-peer financing as regulated activities, with recognized market operators.
- India: the Reserve Bank regulates P2P lending platforms as NBFC-P2P. Equity crowdfunding to the public is not an open retail exemption.
- UAE: the DFSA in the Dubai International Financial Centre and the FSRA in Abu Dhabi Global Market each license crowdfunding platforms, with their own offer limits and retail restrictions. Onshore UAE rules are separate.
- China: the 2016 peer-to-peer crackdown effectively closed the old P2P market. It is not a usable template.
Earlier country explainers on this site, including France (2014 and 2016), Finland (2016), and the original MAS and SC consultations, describe regimes that the EU regulation or later national rules have overtaken. They are kept as an archive, not as current law.
Types of investors
In the United States, the practical split is between accredited and non-accredited investors. The tests live in Rule 501 of Regulation D.
A natural person is accredited if any of the following is true:
- Net worth over $1 million, alone or with a spouse or spousal equivalent, excluding the primary residence.
- Income over $200,000 in each of the two most recent years, or joint income over $300,000, with a reasonable expectation of the same in the current year.
- A Series 7, Series 65, or Series 82 license in good standing.
- Certain directors, executive officers, and knowledgeable employees of the issuer or of a private fund, under the specific prongs of the rule.
The income and net-worth figures have not been inflation-adjusted. The SEC proposed an exam-based route on October 1, 2026, but it is not yet a way to qualify.
Reg CF is the exemption built so non-accredited investors can participate, subject to the dollar limits above. Rule 506(c) is accredited-only. Reg A+ Tier 2 allows both, with a 10 percent cap on non-accredited buyers unless the securities will list.
Types of crowdfunding
Investment crowdfunding
A platform may offer debt, equity, SAFEs, revenue share, convertible notes, or other contracts that give the investor an expected return. Early-stage companies and real estate still account for most volume. Later-stage issuers use the same exemptions when they want customers on the cap table, or when a Reg D round is paired with a smaller Reg CF community round.
Tokenized securities
A security token, or digital security, is a conventional security — equity, debt, or a revenue claim — recorded on a blockchain. The 2017–2018 initial coin offering boom was largely unregistered and was shut down where regulators treated the tokens as securities. A token does not create a new exemption. In the United States, it still has to fit Reg D, Reg CF, Reg A, or a registered offering.
The live policy question in 2026 is the SEC’s proposed Regulation Crypto Asset, which would add crypto-specific exemptions modeled on Reg CF and Reg A. Until that proposal is adopted, existing exemptions are the compliant path.