Regulation CF (Regulation Crowdfunding) and Regulation D are two different rules issued by the U.S. Securities and Exchange Commission (SEC) that govern how companies can raise capital from investors.
Regulation CF is a crowdfunding exemption that allows small companies to raise capital from a large number of investors through online platforms. Under this rule, companies can raise up to $1.07 million in a 12-month period by selling securities (such as stocks or debt) to both accredited and non-accredited investors. These securities are typically sold through crowdfunding platforms, such as Kickstarter or GoFundMe.
Regulation D, on the other hand, is a set of rules that provides an exemption from the registration requirements of the Securities Act of 1933 for certain private offerings. These rules provide a way for companies to raise money from investors without registering the securities with the SEC. Under Rule 504 of Regulation D, companies can raise up to $5 million in a 12-month period and can sell securities to both accredited and non-accredited investors.
In summary, Regulation CF is intended for smaller offering and lower threshold investors, while Regulation D is designed for more sophisticated investors, and it has a higher cap on raise.
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