What Is Equity Crowdfunding?
Equity crowdfunding allows everyday people to invest in private companies and startups in exchange for ownership shares. Unlike traditional venture capital, which is limited to accredited investors and institutions, equity crowdfunding opens private market investing to everyone.
How Does Equity Crowdfunding Work?
Companies raise capital by listing offerings on platforms like StartEngine. Investors browse available opportunities, review company information, and invest amounts starting as low as $100. In return, investors receive equity (ownership shares) in the company.
Regulation CF vs Regulation A+
The SEC regulates equity crowdfunding through two main frameworks. Under Regulation Crowdfunding (Reg CF), companies can raise up to $5 million per year from both accredited and non-accredited investors. Under Regulation A+ (Reg A), companies can raise up to $75 million per year with more extensive SEC filings.
Investor Limits
Under Reg CF, non-accredited investors have annual investment limits based on their income and net worth. Accredited investors (individuals with income over $200K or net worth over $1M excluding primary residence) have no investment limits.
Risks of Equity Crowdfunding
Investing in startups carries significant risk. Most startups fail, and investments are typically illiquid — you may not be able to sell your shares for years. Always invest only what you can afford to lose and diversify across multiple companies.
How to Get Started
Ready to explore equity crowdfunding? Browse current investment opportunities on StartEngine, or learn more about how to invest in startups.