3 pathsRegulation D, Regulation Crowdfunding and Regulation A are not three ways to do the same raise. They are three different companies raising three different kinds of money from three different sets of people — and the cost, the disclosure and the shareholder register that comes out the other end are not comparable.
Reg D · Reg CF · Reg A · Exempt offerings under the Securities Act The comparison is usually framed as a question about how much you can raise. That is the least interesting difference between them. The one that matters is who ends up on your cap table, and what you owe them afterwards.
Dealithic ResearchSecurities Law · Capital Raising
September 202612 min read
AudienceFounders · Sponsors · Operators
Every US company raising capital without registering a public offering is relying on an exemption. Three of them account for nearly all of it. Regulation D is the private placement most people mean when they say “we raised a round”. Regulation Crowdfunding lets ordinary people invest, up to $5 million a year. Regulation A — often called Reg A+ — is the one that sits closest to a public offering without being one, and it is the only one of the three where the SEC actually reads your document before you can sell.
Choosing between them is not a legal question first. It is a question about what kind of company you are and what kind of shareholder base you can live with. The legal machinery follows from that answer.
Side by Side by Side
The complete comparison
Regulation D — Rule 506Raise LimitNo cap.
Who Can InvestAccredited investors. Under 506(b), up to 35 non-accredited sophisticated investors as well; under 506(c), accredited only.
SEC ReviewNone. Form D is a notice filing after the fact.
Advertising506(b): no. 506(c): yes, with verification of every investor.
IntermediaryNot required.
Ongoing ReportingNone to the SEC. Whatever you promised investors.
Typical TimelineWeeks. Constrained by your investors, not the regulator.
Best ForAlmost every private raise with institutional or high-net-worth investors.
Regulation CrowdfundingRaise Limit$5,000,000 in any rolling 12 months.
Who Can InvestAnyone. Non-accredited investors are subject to personal investment limits.
SEC ReviewNo qualification, but Form C must be filed before you offer.
AdvertisingLimited. You may direct people to the portal; the offering terms live there.
IntermediaryRequired. A registered funding portal or broker-dealer. You cannot run it yourself.
Ongoing ReportingAnnual report to the SEC and to investors.
Typical TimelineMonths, including financial statement preparation.
Best ForConsumer brands with an audience that would rather own a piece than just buy the product.
Regulation A — Tier 1 & Tier 2Raise LimitTier 1: $20,000,000. Tier 2: $75,000,000. Per 12 months.
Who Can InvestAnyone. Non-accredited investors are capped in Tier 2 offerings.
SEC ReviewYes. Form 1-A must be qualified by the SEC before you can sell.
AdvertisingYes, including “testing the waters” before qualification.
IntermediaryNot required, though most issuers use one.
Ongoing ReportingTier 2: audited financials plus semi-annual and annual reports, ongoing.
Typical TimelineSix months and up, driven by SEC comments.
Best ForLater-stage issuers who want retail scale and can carry public-company-style reporting.
The Real Difference
It is not the cap. It is the register.
Founders compare these three on the raise limit because it is the number in every summary table, including the one above. It is rarely the binding constraint. Very few companies choosing between Reg CF and Reg A are doing so because they need more than $5 million; they are choosing between two entirely different relationships with their shareholders.
A Reg D round adds a handful of sophisticated names to your cap table. They can read a term sheet, they expect to be illiquid for years, and there are few enough of them that you can call every one of them personally when something goes wrong.
A Reg CF or Reg A round can add thousands of individual shareholders, many of whom are investing for the first time. That is a genuine asset — a distributed base of people with a reason to care about your company — and it is also a permanent operational obligation. They will email. They will ask when the liquidity event is. They will find each other on the internet and form a view collectively. Companies that ran a great crowdfunding round and a poor investor-communication programme afterwards learned that the register is the product.
“The question is not how much you can raise under each. It is whether you want twelve shareholders or four thousand, and whether you have built anything to serve four thousand.”
The Investor Limits
What a non-accredited investor is allowed to put in
One of the structural differences that gets lost in the summary tables: under Reg CF, an individual investor's own cheque is capped, and the cap depends on their finances.
Reg CF investor limits, per rolling 12 months- If either annual income or net worth is below $124,000: the greater of $2,500, or 5% of the greater of income or net worth.
- If both are $124,000 or above: 10% of the greater of income or net worth, capped at $124,000.
- Accredited investors: no limit.
This is why a Reg CF round is arithmetically a numbers game. If your average non-accredited cheque is $800 — which is a realistic figure for consumer offerings — then $3 million means roughly 3,750 investors, each of whom has to be persuaded individually. That is a marketing campaign with a securities filing attached, not a fundraise with a marketing component. Budget it as one.
Cost and Time
What each one actually takes out of you
Reg D — the cheapest by a distance- Offering documents, a Form D notice filing, and state notice filings where investors reside.
- No regulator stands between you and your first close. The timeline is set by your investors.
- The real cost is distribution: with no advertising under 506(b), you are limited to people you already know. See what $100,000 in fees buys you in a Reg D raise.
Reg CF — cheap filing, expensive campaign- Form C, financial statements at a level that scales with the size of the raise, and a registered portal that takes a percentage.
- The filing is the small line. The campaign to reach several thousand individual investors is the large one.
- An annual report obligation that continues after the round closes.
Reg A — a public offering in everything but name- Form 1-A, audited financials for Tier 2, and an SEC review cycle with comment letters that you answer and re-file.
- Six months is a normal timeline, and it is not fully under your control.
- Tier 2 brings ongoing semi-annual and annual reporting — a permanent cost centre, not a transaction cost.
- In exchange, Tier 2 gets blue sky preemption for most sales, which removes the state-by-state layer.
The blunt version“Reg D is a fundraise. Reg CF is a marketing campaign with a filing attached. Reg A is an IPO with the training wheels on — and the reporting bill that comes with them.”
How to Choose
The decision, in the order it should be made
Choose Reg D when:- Your capital is coming from institutions, funds, family offices or high-net-worth individuals
- You want speed and a shareholder register you can hold in your head
- You have no audience of customers who would plausibly want to own equity
- You cannot carry ongoing SEC reporting, and would rather not learn to
Choose Reg CF when:- You have a real audience — customers, users, a community — and the raise is partly a loyalty exercise
- $5 million in twelve months is genuinely enough
- You have the marketing capability to convert several thousand small investors, and the appetite to serve them afterwards
- A distributed shareholder base is an asset to your business rather than an overhead
Choose Reg A when:- You need materially more than $5 million from a retail base
- Your financials are already audit-ready, or close to it
- Six months of regulatory process is acceptable against your funding runway
- Public-company-style reporting is somewhere you intend to end up regardless
Two practical notes that do not fit neatly in a table. First, these are not mutually exclusive over time — plenty of companies run a Reg D round and a Reg CF round in sequence, and integration rules govern how closely those can sit together. Second, the exemption is chosen before you solicit anyone, not after. Talking publicly about a raise you intended to do under 506(b) is a problem you cannot fix retroactively, which is the subject of the 506(b) vs 506(c) piece.
Not sure which one you are?The Raise Readiness scorecard tells you where a round would break before you run it.
A few questions about your company, your investors and your documents, and you get a straight read on what you are actually ready to run — and what to fix first. Free, and it takes a few minutes.
Raise Readiness → Not legal adviceGeneral information about three exemptions, with limits current as of September 2026. Not legal advice, and no attorney-client relationship is created by reading it. These caps have moved before — both Reg CF and Reg A Tier 2 were raised in 2021 — and the facts of your offering matter more than any table. Confirm with your own counsel before acting.
“Pick the exemption that matches the shareholders you want, not the one with the biggest number at the top of the column. You will live with the register far longer than you live with the raise.”
Choose the register. The paperwork follows.
© 2026 Dealithic · dealithic.coReg DReg CFReg A+Exempt OfferingsCrowdfundingForm CForm 1-A