The crowdfunding cap rose to five million dollars in 2021

The record

Regulation Crowdfunding lets a company raise money from the public online through a registered intermediary, under rules the Commission's own page says have applied since 2016. The offering limit was not fixed at today's level from the start. The Commission's adopting release, dated 2 November 2020, records that the statutory cap under Securities Act Section 4(a)(6) stood at 1.07 million dollars, itself an inflation adjustment of an original 1 million dollar figure, before the release raised it to 5 million dollars in a 12-month period. The release states the amendments took general effect on 15 March 2021, and the current SEC page confirms the 5 million dollar ceiling remains the operative limit as retrieved.

What the sources establish

The two documents, read together, show a exemption whose availability changed by regulatory action rather than by statute alone: Congress set the original cap and its inflation-adjustment mechanism, and the Commission used exemptive authority under Securities Act Section 28 to raise it further. The release also adjusted investor investment limits for accredited investors relying on the exemption and extended certain temporary financial-statement accommodations. The current SEC page adds the operational detail that all Regulation Crowdfunding transactions must run through an SEC-registered broker-dealer or funding portal and that issuers must disclose required information in filings with the Commission, to investors, and to that intermediary, typically on Form C.

Scope and revision

The 5 million dollar figure is a ceiling on what one issuer may raise under this specific exemption in a 12-month period, not a measure of typical raise size, and it says nothing about valuation, price per share or how many investors participated. The release itself notes it was declining to raise the limit further, to 10 million dollars, as some commenters requested, distinguishing Regulation Crowdfunding's ceiling from the larger figures available under Regulation A or Rule 504. A reader comparing crowdfunding totals across years should also note the limit itself changed in March 2021, so a simple count of offerings at or near the cap does not mean the same dollar exposure before and after that date.

The decision in front of you

A founder weighing Regulation Crowdfunding against Regulation D should treat the 5 million dollar cap as a hard ceiling on this particular route, with public disclosure and intermediary obligations Rule 506(b) does not impose. This is an editorial framing beyond the release itself: crowdfunding trades some of the informality of a private round for public visibility of the offering's terms.

• Is a cited crowdfunding total measured against the 1.07 million dollar cap in force before 15 March 2021 or the 5 million dollar cap after?
• Does the offering's Form C disclose the same total the issuer is publicizing elsewhere?
• Would this raise fit within Regulation D instead, and if so, why was the public route chosen?

The rule sets a ceiling and an intermediary requirement; it does not, on its own, describe how a given company used the room the ceiling provides.