Any time a company sells securities, U.S. law says it must either register the offering with the SEC — the expensive process behind an IPO — or use an exemption. Three exemptions cover most private fundraising. Knowing which is which explains why some deals are open to everyone and others are reserved for the wealthy.
| Reg CF | Reg A+ | Reg D | |
|---|---|---|---|
| Annual limit | $5M | $20M (Tier 1), $75M (Tier 2) | None |
| Investors | Anyone, with limits for non-accredited | Anyone; Tier 2 limits non-accredited investors to 10% of income or net worth | Accredited only (506(c)); up to 35 sophisticated non-accredited in 506(b) |
| SEC review | File Form C; no SEC approval | SEC qualifies the offering | File a notice only |
| Must use intermediary | Yes | No | No |
| Financial statements | Reviewed or audited by size | Audited for Tier 2 | None mandated (506(c)) |
| Ongoing reporting | Annual Form C-AR | Annual and semiannual (Tier 2) | None |
Reg D: the default for venture rounds
Most angel and VC rounds use Rule 506(b) or 506(c) of Regulation D. There's no cap and very little paperwork, but in practice the investors must be accredited — roughly, $200K+ in income or $1M+ in net worth excluding your home, or certain professional licenses. Rule 506(c) allows public advertising, but the company must verify every investor's accreditation.
Reg CF: open to everyone, smaller rounds
Reg CF trades a lower cap and more disclosure for access to every investor. It's the cheapest way to raise from your own customers and community. The requirement to use a registered platform adds cost but also brings an investor audience.
Reg A+: the "mini-IPO"
Reg A+ allows much larger raises from the public, but the SEC reviews and qualifies the offering first, which takes months and significant legal and audit cost. It suits companies that have outgrown Reg CF and want to raise $5M+ from a broad base, sometimes with a path to trading on a public market.
Combining them
Many companies run a Reg CF offering alongside a Reg D round — the crowd invests through the platform while accredited and institutional investors come in through 506(b) or (c), often on the same terms. This lets a company raise more than $5 million in total while still including its community. The SEC's integration rules allow it as long as each offering follows its own requirements, and coordinating it is a job for your attorney.
Proposals to raise the Reg CF cap to $20 million are being discussed at the SEC as of November 2026. If adopted, the line between Reg CF and Reg A+ Tier 1 would blur considerably.