Reg D vs Reg CF: Choosing the Right Path for You

Reg A, Reg D, and Reg CF all let a private company sell securities without running a full public offering. Founders tend to compare Reg A and Reg D first, but the more useful way to see all three is by what they actually decide for you: who is allowed to invest, and how much you can raise from them.

On that axis, Reg D is the outlier. It’s built for private raises from wealthy, accredited investors, and it carries almost no federal review. Reg A and Reg CF are closer cousins — both open the raise to the general public, both let non-accredited investors in, and both come with real disclosure obligations. What separates those two is mostly scale: Reg CF stays small and affordable, while Reg A lifts the ceiling to $75 million and prices the compliance to match.

Here’s how each exemption works, where each one breaks down, and a straightforward way to decide.

What Is a Reg A Offering?

Regulation A, often called Reg A+ since the SEC’s 2015 expansion under the JOBS Act, is an exemption for public offerings. Anyone can invest, accredited or not, and issuers can market the offering openly. In exchange, the SEC reviews and qualifies the offering before a single dollar changes hands.

The exemption has two tiers:

Tier 1 allows up to $20 million in a 12-month period. It skips audited financials and ongoing SEC reporting, but every state where investors live gets to review the offering under its own blue sky laws. That coordinated state review is slow and expensive enough that Tier 1 sees limited use.

Tier 2 allows up to $75 million in a 12-month period, and it preempts state review entirely. The trade: audited financial statements, an offering circular on Form 1-A that the SEC must qualify, and ongoing reports after the raise closes, including annual reports on Form 1-K and semiannual reports on Form 1-SA. Non-accredited investors in a Tier 2 offering are also capped at 10 percent of their annual income or net worth, whichever is greater.

Qualification is the part founders underestimate. A Reg A offering is a real filing with real SEC staff comments, and the process typically runs months, not weeks. Budget for securities counsel, auditors, and a marketing operation capable of converting retail interest into checks. A Reg A raise is a campaign, and campaigns have overhead.

What Is Reg D?

Regulation D is the workhorse of private capital in the United States. The overwhelming majority of private raises, from angel rounds to nine-figure growth rounds, run through it, and the SEC’s own offering statistics put annual Reg D fundraising in the trillions of dollars. Two rules matter for most founders:

Rule 506(b) allows an unlimited raise from an unlimited number of accredited investors, plus up to 35 sophisticated non-accredited investors. The constraint is silence: no general solicitation. You cannot advertise the offering, post about it, or pitch strangers. You raise from people you already have a relationship with, and investors can self-certify their accredited status.

Rule 506(c) also allows an unlimited raise and removes the advertising ban. You can market the offering publicly, run ads, and pitch from a stage. The trade: every single investor must be accredited, and self-certification is off the table. The issuer has to take reasonable steps to verify accreditation, usually through tax documents, bank statements, or a letter from the investor’s CPA or attorney.

Neither rule requires SEC approval. There is no qualification, no review, and no waiting period. The only federal filing is Form D, a short notice filed within 15 days after the first sale. That is why a Reg D round can close in weeks while a Reg CF campaign is still in portal review and a Reg A offering is still waiting on its first round of SEC comments.

What Is Reg CF?

Regulation Crowdfunding is the exemption built for community raises. A company can raise up to $5 million in a 12-month period from anyone, accredited or not. The entire offering runs through a single SEC-registered intermediary, either a broker-dealer or a funding portal under FINRA oversight. You cannot host a Reg CF raise on your own website. The portal is written into the rule itself, and its compliance team reviews your campaign materials before anything goes live.

The disclosure document is called Form C, filed with the SEC before the campaign opens. Unlike a Reg A offering circular, Form C skips SEC qualification entirely and works as a pure disclosure filing. The distinction matters: the SEC does not gatekeep your launch date, but the liability for what the filing says is entirely yours.

Here are three things about a Reg CF raise that founders should keep in mind:

Financial requirements scale with the raise. Smaller offerings can rely on financials certified by the principal executive officer or reviewed by an independent accountant. Larger offerings step up to reviewed or audited statements. You are not paying Reg A-level audit costs to raise a couple million dollars of expansion capital, and if your books are already clean from running a real business, the disclosure work is lighter than founders expect.

Investor money sits in escrow against a minimum target. You set a funding goal, and if the campaign closes below it, investors are never charged and you receive nothing. The all-or-nothing structure protects investors, but it also means a poorly prepared campaign fails in public.

Non-accredited investors have individual caps. How much each person can invest across all Reg CF offerings in a 12-month period is tied to their income and net worth. Accredited investors face no such limits, which is why a well-run Reg CF campaign often pairs hundreds of small community checks with a handful of large anchor investments.

After the raise, securities carry a one-year resale restriction. Companies must file an annual report until its Reg CF reporting obligations end. The ongoing burden is lighter than Tier 2 Reg A, but it is not zero.

Reg CF is meaningfully cheaper and faster to launch than Reg A, and meaningfully slower and more public than Reg D. But it offers something neither of the others can at this price: a legal way to turn your customer base into shareholders before you have to justify Reg A’s overhead costs.

Reg A vs Reg D vs Reg CF: The Real Difference

The comparison goes much deeper than features. At its core, you are deciding who your investors will be.

Reg D assumes your capital comes from a small number of large checks written by accredited investors. The compliance burden is light because the SEC assumes those investors can protect themselves.

Reg A and Reg CF both assume your capital comes from a large number of small checks, many from retail investors, so both carry disclosure obligations Reg D does not. The difference between the two is scale. Reg CF keeps the raise small and the compliance proportionate. Reg A raises the ceiling 15-fold and prices the disclosure accordingly.

Here’s how the exemptions compare across several key parameters:

	Reg CF	Reg A (Tier 2)	Reg D 506(b)	Reg D 506(c)
Raise cap (12 months)	$5 million	$75 million	None	None
Non-accredited investors	Yes, with investment limits	Yes, with investment limits	Up to 35, sophisticated only	No
General solicitation	Yes, must direct to the portal	Yes	No	Yes
SEC review	Form C filing, no approval	Qualification required	None, Form D notice only	None, Form D notice only
Audited financials	Only at larger raise sizes	Required	Not required by the rule	Not required by the rule
Ongoing reporting	Annual report	Yes (1-K, 1-SA, 1-U)	No	No
Intermediary required	Yes, portal or broker-dealer	No	No	No
Typical timeline to first close	One to three months	Months	Weeks	Weeks

One thing the table hides: you are not choosing one exemption for life. These can be layered. Treat the choice as your starting point, not a marriage. The real question is which exemption fits the round in front of you right now.

The practical sequence many companies follow: Reg CF to prove the community will fund you, Reg A once the raise target outgrows the $5 million cap, Reg D running alongside for the large checks. Platforms built for equity crowdfunding exist precisely to run that ladder in sequence or in parallel.

How to Choose Between Reg A, Reg D, and Reg CF

Work through these five questions in order.

Can your existing network fund the round? If the answer is yes, 506(b) is the cheapest, fastest path in securities law. No advertising means no advertising rules to violate, and self-certification keeps friction low. Most seed and venture rounds live here for a reason.
Do you need to raise publicly, but only from accredited investors? 506(c) buys you the megaphone without the Reg A price tag. This fits founders with a strong story and no warm network: you can run paid acquisition to accredited investors, but every one of them gets verified.
Do you want customers and community on the cap table? Now you are in retail territory, and Reg D cannot take you there at scale. Under $5 million, Reg CF is the efficient route: the portal handles the infrastructure, the disclosure scales with the raise, and the campaign doubles as a marketing event. Above $5 million, Reg A Tier 2 is the vehicle built for the job. Consumer brands do this deliberately, because an investor who owns a piece of the company is a customer with a reason to evangelize it.
Is the community you would raise from real or hypothetical? This is the question Reg CF founders skip at their own expense. The exemption hands you legal access to retail investors, not the investors themselves. A Reg CF campaign converts an existing audience, customers, subscribers, and followers into shareholders, which is why operating businesses with revenue and a customer base hold a structural advantage here.

If you already have paying customers and an engaged list, you are starting from the position everyone else is trying to manufacture mid-campaign. Founders with traction and community are more likely to outperform founders with neither.

Can you carry the overhead? A Reg A offering means audited financials, SEC qualification, ongoing reports, and a genuine marketing budget. A Reg CF offering means Form C disclosure, portal review, and a real campaign operation, at a fraction of that cost. If the raise target does not justify the overhead of the exemption you are eyeing, the exemption does not fit yet, regardless of how appealing 10,000 investor-advocates sound.

The pattern across all five questions: raise size sets the ceiling, but investor access sets the strategy.

Can You Combine Reg A, Reg D, and Reg CF?

Short answer: Absolutely, yes.

The exemptions are not mutually exclusive, and the most sophisticated raises rarely use just one. The three most commonly used structures:

Reg CF + Reg D 506(c): the community-stage pairing. Reg D is the exemption Reg CF issuers cross into most often. In the SEC’s analysis of the crowdfunding market, roughly a quarter of all Reg CF offerings came from issuers that had also filed a Form D, rising to about 30 percent among offerings that raised proceeds. The campaign collects the community checks while the 506(c) runs in parallel for accredited investors, sometimes on different terms. Funds raised under other exemptions do not count against the $5 million Reg CF cap, so the combined raise can meaningfully exceed what either allows alone.

Reg A Tier 2 + Reg D 506(c): the same play at larger scale. The SEC’s Regulation A data shows issuers have also used Reg D in roughly a third of Reg A offerings. Tier 2 carries the retail side, and the 506(c) brings in the anchor checks.

Reg CF first, Reg A next: the sequential path. A company outgrows its $5 million cap, files a Reg A offering for the next round, and reuses the investor community the first campaign built. Worth knowing before you plan around it: only about 6 percent of Reg A issuers have ever used Reg CF, per the same SEC data. Most companies never need the full ladder, and climbing it is a choice, not a default.

One warning applies to all three exemptions:

Done correctly, each offering stands on its own exemption. Done carelessly, the offerings can be integrated, meaning the SEC treats them as one offering that fails every set of rules involved. The SEC’s integration framework provides safe harbors for concurrent and sequential offerings, but this is squarely a design-it-with-counsel decision, not a copy-a-template decision.

Frequently Asked Questions

What is the difference between Reg A and Reg D? Reg A is an exemption for public offerings. Anyone can invest, but the SEC has to qualify the offering first, and the issuer takes on audited financials and ongoing reporting — the price of raising up to $75 million from the general public. Reg D is an exemption for private placements: no raise cap, no SEC review, and minimal disclosure requirements, but the investor pool is effectively limited to accredited investors.

What is the difference between Reg CF and Reg A? Both open the raise to non-accredited investors. Reg CF caps the raise at $5 million, requires a registered funding portal or broker-dealer, and uses a Form C disclosure filing that the SEC does not approve. Reg A allows up to $75 million, runs on your own terms without a mandatory portal, and requires SEC qualification of the offering plus audited financials and ongoing reports at Tier 2. Reg CF is the entry point; Reg A is the scale-up.

Which is better for startups, Reg A or Reg D? Reg D is faster and cheaper when accredited investors can fund the round. Reg A wins when the strategy depends on retail investors, community ownership, or public marketing of an offering above the Reg CF cap. And if the round is under $5 million and the strategy depends on the community, the honest answer is often neither. Reg CF is generally a much better fit.

Do Reg D offerings require SEC approval? No. Reg D offerings require no SEC review or approval. The issuer files Form D, a brief notice, within 15 days after the first sale. The offering can begin, and close, without the SEC ever examining it. Reg CF also skips approval, though its Form C must be filed before the campaign launches. Reg A is the only one of the three that requires SEC qualification before sales, which is the core reason Reg D rounds move so much faster.

How much can you raise under Reg A+? Up to $20 million in a 12-month period under Tier 1, and up to $75 million under Tier 2. Tier 2 accounts for the vast majority of Reg A activity because it preempts state-by-state review, even though it adds audited financials and ongoing reporting requirements.

Can you raise under Reg A and Reg D at the same time? Yes. Concurrent offerings are common: Reg A for retail investors, Reg D 506(c) for accredited investors, each conducted under its own rules. The same logic applies to running Reg CF alongside a 506(c). The structure has to respect the SEC’s integration framework so the offerings are not collapsed into one, which makes experienced securities counsel non-negotiable.

Structure the Raise Before You File Anything

The exemption you choose determines who can fund you, how you are allowed to talk about the raise, and what you owe regulators for years afterward. For a business with revenue, customers, and a next stage of growth to fund, that decision deserves more than a comparison table.

Planet Wealth runs offerings under Reg CF, Reg A, and Reg D on a single FINRA-registered platform, which means the conversation can start with your raise and end with the exemption, instead of the reverse. Talk to the team about how your round should be structured.

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Reg A vs Reg D vs Reg CF: Which Exemption Fits Your Raise