Crowdfunding

Overview

Regulation CF, established in 2016, allows everyone to invest in new startups and local businesses via online third party intermediaries or portals. Startups control every aspect of the capital raise, from security type, to minimum investment per investor, to overall minimum and maximum raise limits. It is imperative to utilize seasoned crowdfunding lawyers, who are able to ensure compliance with the various requirements and post-funding compliance obligations. 

New Regulations

In March 2021, Reg CF rules changed, further boosting the opportunities for startups and investors. The new rules provide for the following benefits: 

  • Overall aggregate offer limit per 12-month period raised from $1.07M to $5M.
  • Individual investor caps raised. Accredited investors now have no limits, unaccredited investors limits boosted. 
  • Special Purpose Vehicles allow all Reg CF investors placed in one legal bucket, solving “messy cap table” problem. 
  • Companies can “test the waters” (gauge interest) in raise prospects before committing substantial resources. 

Fixed Fee Crowdfunding Package

NEXT attorneys have completed a variety of Crowdfunding transactions and understand the critical provisions and process involved with a Reg CF crowdfunding round. Our fixed fee Crowdfunding Package includes:

  • Assistance in identifying the crowdfunding portal that is the best fit for you.
  • Review of all corporate governance documents in preparation for the raise, including amending articles of incorporation and reviewing bylaws and/or operating agreement 
  • All disclosures and regulatory compliance with the SEC
  • Recommendation of a particular financial instrument to offer in the CF raise, and tailoring of the contract to fit your needs 
  • Review of contracts and negotiations with vendors 
  • Advice on social media promotion and other marketing efforts 
  • Guidance on any legal, regulatory, or compliance questions
  • Draft answers (if needed) to investor questions on portal page

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