Under Regulation Crowdfunding (Reg CF), as of 2026, the law allows you to raise up to $5 million in a 12-month period. However, the platform’s role is strictly as a “middleman” (an intermediary), not the buyer.
Here is how the $5 million raise works and what you need to know:
1. The Platform is the “Venue,” Not the “Buyer”
Crowdfunding platforms (like Wefunder, StartEngine, or Republic) are SEC-registered funding portals. By law, they are prohibited from:
- Buying the stock themselves.
- Offering investment advice about your company.
- Handling the investor’s money directly (it usually goes into an escrow account).
2. The $5 Million Limit
The SEC increased the Reg CF limit to $5 million (it was originally $1.07 million).
- The Cap: This is a rolling 12-month limit.
- The Investors: You can sell to both “accredited” investors (wealthy individuals) and “non-accredited” (everyday) investors.
3. Requirements for a $5 Million Raise
Raising $5 million is a “Tier 2” level of effort. Because you are asking for a significant amount of money, the SEC requires high levels of transparency:
- Audited Financial Statements: Since you are raising more than $1.235 million (the current threshold), you must provide two years of financial statements audited by an independent CPA.
- Form C Filing: You must file a Form C with the SEC, disclosing your business plan, use of funds, and ownership structure.
- Single Platform: You must use only one platform for the duration of the offering.
4. Comparison of Raising $5M vs. Other Methods
| Feature | Regulation Crowdfunding (Reg CF) | Regulation A+ (Tier 2) |
|---|---|---|
| Max Raise | $5 million | $75 million |
| Audit Required? | Yes (for $1.235M+) | Yes (Always) |
| SEC Review | Notice filing (fast) | Full qualification (slow, 3-5 months) |
| Cost | $10k–$30k+ (Legal/Audit) | $50k–$100k+ (Legal/Audit) |