Yes, an issuer can run both a Regulation Crowdfunding (Reg CF) campaign and a Regulation A+ (Reg A+) campaign at the same time, as long as they comply with the requirements of both regulations.

Reg CF and Reg A+ are both securities offerings that allow companies to raise capital from the general public. However, there are some key differences between the two regulations, such as the amount of money that can be raised, the disclosure requirements, and the eligibility criteria for issuers.

Under Reg CF, issuers can raise up to $5 million in a 12-month period, and they must file certain disclosures with the SEC and provide ongoing updates to investors. Reg A+, on the other hand, allows issuers to raise up to $75 million in a 12-month period, and they must file an offering statement with the SEC and provide ongoing reports to investors.

Issuers must ensure that they comply with the requirements of both regulations, which may involve preparing separate disclosures and reports for each offering. They must also consider how the two offerings may impact each other, such as how investors in one offering may perceive the risks and opportunities of the other offering.

Overall, running both a Reg CF campaign and a Reg A+ campaign at the same time requires careful planning and compliance with regulatory requirements.

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Yes - the US offers tax relief for investing in startups through various provisions in the tax code, including Sections 1202, 1244, and 1045. 

Section 1202 - Qualified Small Business Stock (QSBS): Investors in qualified small businesses can exclude up to 100% of their capital gains from federal income tax if they hold the stock for more than five years, subject to certain limits and conditions.

Section 1244 - Small Business Stock Loss Deduction: Investors in certain small businesses can claim an ordinary loss deduction on their income tax return if the investment becomes worthless. This allows the loss to offset other income, with an annual deduction limit of $50,000 for single filers and $100,000 for married couples filing jointly.

Section 1045 - Rollover of Gains from Small Business Stock: Investors in qualified small businesses can defer capital gains tax on the sale of their QSBS if they reinvest the proceeds into another QSBS within 60 days. This rollover provision allows investors to maintain their tax-advantaged status while continuing to invest in the startup ecosystem.

For a more detailed explanation of these tax relief provisions, check out my article on Three Ways the US Gives Tax Relief to Startup Investors.

Also, for a more detailed guide that discusses other tax considerations for startup investors, you can check out my article Navigating Startup Investing Taxes - the Comprehensive Guide for Investors. 

 

Please note that none of this should be construed as tax advice and is for informational purposes only - always consult a tax professional.

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The limitation on how much a nonaccredited investor can invest during a 12-month period depends on his or her net worth and annual income:

 

•       The greater of $2,500, or 5 percent of the greater of the investor’s annual income or net worth, if either the investor’s annual income or net worth is less than $124,000; or

•       Ten percent of the greater of the investor’s annual income or net worth, not to exceed an amount sold of $124,000, if both the investor’s annual income and net worth are equal to or more than $124,000.

 

There are no current plans to change these rules, although the dollar amounts may increase from time to time.  Under Securities Act Section 4A(h), the Commission is required to adjust the dollar amounts in Section 4(a)(6) “not less frequently than once every five years, by notice published in the Federal Register, to reflect any change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics.” 

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To become a crowdfunding funding portal under the JOBS Act, an entity must register with the Securities and Exchange Commission (SEC) as a "funding portal" and comply with certain regulatory requirements. Here are some of the key requirements:

1: Registration: The entity must register with the SEC as a funding portal by filing Form Funding Portal and must become a member of a national securities association (currently FINRA - the only game in town). Form Funding Portal requires information from the funding portal applicant, including information about the funding portal's business, principals, control relationships, and employees. See: https://www.sec.gov/tm/divisionsmarketregtmcompliancefpregistrationguidehtm

2: Restrictions on Activities: Funding portals are limited in the types of activities they can engage in. For example, they are prohibited from offering investment advice, soliciting transactions, or handling investor funds or securities. They may provide limited communication channels for issuers to communicate with potential investors, but all communication must be conducted through the portal and must be accessible to all investors. IMHO, some restrictions may be tighter than they should be given the capabilities of harnessing the crowd with technology.

3: Investor Protection: Funding portals must take steps to protect investors, including verifying the identity of each investor and limiting the amount of money each investor can invest in a given offering. They must also provide investors with educational materials and warnings about the risks of investing in crowdfunding offerings. It's important to remind investors at every turn that investing is risky - and they can lose all of their investment. Unlike the world of crypto where FOMO is the key selling point, this is REGULATED INVESTMENT CROWDFUNDING so education, disclosures, and caution is warranted.  

4: Disclosure Requirements: Funding portals must provide certain disclosures to investors, including information about the issuer, the terms of the offering, and the risks involved in investing in the offering. They must also provide ongoing updates about the issuer and the offering. When in doubt, build disclosures throughout your platform's workflow.

5: Record keeping and Reporting: Funding portals must maintain records of all transactions conducted through the portal and provide certain reports to the SEC.

Compliance with these requirements is essential for a crowdfunding funding portal to operate legally under the JOBS Act. It is important to note that these requirements may be subject to change as the SEC continues to learn from the experience of industry stakeholders and develop its regulatory framework for crowdfunding offerings.

n...@...l 

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Unless the portal is a licensed broker-dealer, it may not offer investment advice or recommendations or solicit purchases, sales, or offers to buy the securities offered or displayed on its platform.

It may however apply objective criteria to highlight offerings on its platform where: 

(i) The criteria are reasonably designed to highlight a broad selection of issuers offering securities through the funding portal’s platform, are applied consistently to all issuers and offerings and are clearly displayed on the funding portal’s platform; 

(ii) The criteria may include, among other things, the type of securities being offered (for example, common stock, preferred stock or debt securities); the geographic location of the issuer; the industry or business segment of the issuer; the number or amount of investment commitments made, progress in meeting the issuer’s target offering amount or, if applicable, the maximum offering amount; and the minimum or maximum investment amount; provided that the funding portal may not highlight an issuer or offering based on the advisability of investing in the issuer or its offering; and 

(iii) The funding portal does not receive special or additional compensations for highlighting one or more issuers or offerings on its platform.

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506(b) offerings are not typically considered to be a form of crowdfunding. Crowdfunding generally refers to a method of raising funds from a large number of people, often through online platforms, in exchange for equity or other forms of compensation.

506(b) offerings, on the other hand, are private placements that are typically offered to a limited number of accredited investors. While crowdfunding can also be used to raise funds from accredited investors, it often involves a much larger number of investors who may not meet the SEC's accreditation requirements.

However, it's worth noting that some online platforms have emerged that allow companies to conduct 506(b) offerings through crowdfunding-like platforms. These platforms typically provide tools and services to help companies comply with the SEC's regulations regarding private placements and may allow companies to market their offerings to a broader range of accredited investors. These types of platforms are sometimes referred to as "accredited crowdfunding" or "equity crowdfunding for accredited investors."

Overall, while there are some similarities between 506(b) offerings and crowdfunding, they are typically considered to be distinct methods of raising capital, with different regulatory requirements and target audiences.

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The Commission should examine ways to expand their access to capital, but it should do so in a way that mitigates the risks posed by offering investors fewer or no protections.
The author of this statement has a critical attitude towards private market access. They argue that retail investors lack the bargaining power and resources to access the same investments as venture capitalists, and they caution against expanding market access without better protections for investors. They ultimately advocate for increased access to capital, but argue that it must be done in a way that reduces risk for investors. less

Regulated investment crowdfunding, also known as equity crowdfunding, is the process of raising money from a large number of investors, often through online platforms, in exchange for equity in a company. While it can be an attractive way for startups and small businesses to access capital, there are several reasons why it can be difficult to navigate the regulatory environment surrounding investment crowdfunding.

1. Regulatory compliance: Investment crowdfunding is regulated by securities laws, which can be complex and vary by jurisdiction. Platforms that facilitate investment crowdfunding must comply with these laws, which can be difficult to navigate without legal expertise.

2. Investor protection: Securities laws are designed to protect investors from fraudulent or misleading investments. As a result, investment crowdfunding platforms must take measures to ensure that investors are adequately informed about the risks associated with the investment, and that they meet certain criteria for investing, such as income or net worth thresholds.

3. Capital raising limitations: Investment crowdfunding is subject to limitations on the amount of capital that can be raised from individual investors, as well as the total amount that can be raised through crowdfunding in a given period. These limitations can make it difficult for companies to raise the capital they need through investment crowdfunding alone.

4. Competition with other fundraising methods: Investment crowdfunding is not the only way for companies to raise capital. Other methods, such as traditional bank loans, venture capital, or angel investing, may be more attractive to some companies depending on their stage of growth, industry, or funding needs.

Overall, regulated investment crowdfunding can be a complex and challenging process due to regulatory compliance, investor protection requirements, capital raising limitations, and competition with other fundraising methods. However, it can also provide an opportunity for companies to access capital from a large pool of investors and reach a wider audience than traditional fundraising methods.

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Based on the report by the North American Securities Administrators Association (NASAA), it seems likely that they would have a cautious stance toward Regulation Crowdfunding. The report emphasizes the importance of defending public capital markets and raising concerns about efforts that expand the incentives for staying private. This suggests that NASAA may view Regulation Crowdfunding as a potential threat to public markets and the traditional principles of securities regulation.

The report expresses concerns that legislative proposals, such as those in the JOBS Act 4.0, could erode public markets and adversely affect businesses and investors that rely on those markets to raise investment capital. NASAA also highlights opposition to proposals that would limit the role of state regulators in overseeing capital raising in the private market. This stance suggests that NASAA is likely to be cautious about expanding exemptions for private offerings and other regulatory changes that could make it easier for companies to raise capital without going through public markets.

However, NASAA does support certain proposals that could enhance investor protection and improve coordination among state and federal regulators. For example, they advocate for a comprehensive enforcement database that covers everyone convicted or held liable in criminal, civil, and regulatory actions involving financial services. They also call for stronger coordination between state and federal regulators and improved regulatory data collection, particularly on activity in the private markets.

Overall, while NASAA is likely to be cautious about Regulation Crowdfunding, they are also interested in finding ways to improve investor protection and strengthen regulatory oversight in both public and private markets.

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