Issuer Guidelines for Successive Reg CF Offerings

These guidelines are to assist Issuers with understanding additional requirements when they are conducting second or later Regulation Crowdfunding Offerings. This article pertains to Regulation Crowdfunding offerings only. For more information on the differences between Reg CF and Reg A please click here. 

Understanding the Reg CF Annual Raise Limits:

Under Reg CF, an Issuer can raise up to $1.07M each year (a 12 month look back period). 

The amount raised in the preceding 12 months determines what the offering maximum can be for an Issuer looking to conduct a subsequent Reg CF raise in the same time period. The 12 month calculation is determined based on the last date an investor is able to cancel their investment (Typically, 48 hours prior to closing date). 

Regulatory Reporting Requirements:

There are two reporting requirements that apply to Reg CF offerings that affect additional raises. 

1. Annual Reporting Requirements - Form C-AR
2. Progress Updates - Form C-U

Please review the SEC’s reporting requirements in detail available here. Below is a summary of each requirement. If applicable, these will be required to be filed before you can proceed with launching your campaign.

Annual Reporting Requirements 

Each Issuer that successfully completes a Title III Regulation Crowdfunding securities offering is required to annually file with the SEC a Form C-AR and financial statements. This must be done no later than 120 days after the end of the Issuer’s fiscal year covered by such filing. Each Issuer must also post its Form C-AR and financial statements to its own website, and that link must be provided along with the date by which such a report will be available on the issuer’s website.

The Form C-AR contains updated disclosure substantially similar to that provided in the Issuer’s initial Form C, including information on the Issuer’s size, location, principals and employees, business, plan of operations and the risks of investment in the Issuer’s securities; however, offering-specific disclosure is not required to be disclosed in the Form C-AR.

Progress Updates Requirements

An issuer must provide an update on its progress toward meeting the target offering amount within 5 business days after reaching 50% and 100% of its target offering amount. These updates will be filed on Form C-U. If the issuer will accept proceeds over the target offering amount, it also must file a final Form C-U reflecting the total amount of securities sold in the offering. If, however, the intermediary provides frequent updates on its platform regarding the progress of the issuer in meeting the target offering amount, then the issuer will need to file only a final Form C-U to disclose the total amount of securities sold in the offering. 

Due Diligence Process with StartEngine:

Every time an Issuer decides to conduct a Reg CF offering through StartEngine Capital LLC, our registered funding portal, the StartEngine team can assist you with our typical onboarding process to help prepare the Form C filing. 

During this process, StartEngine’s team will review all information with a fresh perspective. This means that we treat all raises equally and you can expect the same level of due diligence to occur for a first offering as with a third offering of an Issuer. In addition, StartEngine’s policies can change from time-to-time due to updated regulatory requirements or company policy.

If you are utilizing any information from a recent offering you conducted via StartEngine, we will require confirmation of what aspects are being used again, what has changed since your prior offering, and any necessary due diligence to validate these changes.

Additional Questions

Please utilize our Learning resource on our website available here for any additional questions relating to StartEngine and the Reg CF process.