Regulation Crowdfunding

Regulation Crowdfunding, usually shortened to Reg CF, is the JOBS Act exemption that allows small raises from the general public. A company may raise up to $5 million in a twelve-month period, and must do it through an SEC-registered funding portal or broker-dealer rather than directly on its own site. Investors do not need to be accredited, but non-accredited investors are capped: across all Reg CF investments in a year, the greater of $2,500 or 5% of income or net worth if both are under $124,000, and 10% if either is above. Accredited investors have no cap.

Reg CF suits a single property or a small portfolio. A sponsor forms a special purpose vehicle for one building, lists it on a funding portal, and raises the equity from the crowd. Because the $5 million cap applies per issuer, a fresh SPV per property means each house gets its own cap. The disclosure is lighter than Regulation A+: a Form C with a description of the business, the offering terms and financial statements, reviewed rather than audited for smaller raises. It is faster and cheaper to launch, which is why a wide range of smaller sponsors use it.

The one-year lock-up is the main one. Reg CF shares cannot be resold for a year except to the issuer, an accredited investor or family, so even platforms with a secondary market cannot let you trade in year one. The lighter disclosure is the other. Unaudited financials and a shorter document mean more of the diligence falls to you. Read the Form C, look up the sponsor, and treat the projections with the caution you would give any forecast made by the person selling the deal. On the plus side, Reg CF is the route that opens genuinely small, local deals to ordinary investors. When a listing on Threeworld comes from a platform that uses it, the platform's page and the offering itself will say so.