Reg A & Reg CF terms, defined

Accredited investor

An individual or entity that meets SEC wealth, income or professional-credential tests — for individuals, generally income above $200,000 ($300,000 with a spouse) or net worth above $1 million excluding a primary residence. Accredited investors face no Reg CF investment limit. #

Non-accredited investor

Any investor who does not meet the accredited-investor tests. Non-accredited investors may buy Reg CF and Reg A securities, subject to investment limits. #

Regulation Crowdfunding (Reg CF)

An SEC exemption created by the JOBS Act that lets a company raise up to $5 million in 12 months from the public through one SEC-registered funding portal or broker-dealer. #

Regulation A (Reg A / Reg A+)

An SEC exemption that lets a company sell securities to the public after the SEC qualifies its offering statement: up to $20 million a year under Tier 1 or $75 million under Tier 2. Often called a mini-IPO, though it does not mean the securities will trade. #

Tier 1

The smaller Reg A tier, capped at $20 million in 12 months. Offerings must also be registered with each state where they are sold, and no ongoing SEC reporting is required. #

Tier 2

The larger Reg A tier, capped at $75 million in 12 months. It preempts state registration, requires audited financial statements and ongoing SEC reports, and limits non-accredited investors to 10% of the greater of income or net worth unless the securities are exchange-listed. #

Form C

The disclosure document a company files with the SEC to conduct a Reg CF offering, covering the business, management, terms, use of proceeds, financial statements and risks. #

Form C-AR

The annual report a company must file and post online after completing a Reg CF offering, until it qualifies to stop reporting. #

Form 1-A

The offering statement a company files with the SEC for a Reg A offering. Part II contains the offering circular investors read. #

Offering circular

The main disclosure document for a Reg A offering, comparable to a prospectus. It describes the business, risks, terms, management, compensation and financial statements. #

Qualification

The SEC staff's clearance of a Reg A offering statement, after which the company may sell securities. Qualification is not an SEC approval or endorsement of the investment. #

Form 253G2

The final offering circular a Reg A issuer files with the SEC after qualification, reflecting the final terms of the offering. #

Funding portal

An SEC-registered, FINRA-member intermediary permitted to host Reg CF offerings. Funding portals may not give investment advice or handle investor funds directly. #

Broker-dealer

A firm registered with the SEC and FINRA to buy and sell securities for others. Many Reg A offerings use a broker-dealer as selling agent. #

Self-underwritten offering

An offering a company sells directly to investors, without an underwriter or commissioned selling agent. #

Escrow

An account held by a third party in which investor funds sit until an offering's conditions, such as a minimum target, are met. #

Pre-money valuation

The value a company assigns to itself immediately before new investment. In crowdfunding and most Reg A offerings, the company sets this figure itself. #

SAFE (Simple Agreement for Future Equity)

An investment contract that converts into equity at a future priced financing, usually subject to a valuation cap or discount. It carries no interest or maturity date and may never convert. #

Convertible note

A loan to a company that accrues interest and is expected to convert into equity at a future financing; if it does not convert, it may be repayable at maturity. #

Valuation cap

The maximum company valuation at which a SAFE or convertible note converts into equity, which sets a ceiling on the conversion price. #

Dilution

The reduction in an existing shareholder's percentage ownership when a company issues new shares. #

Bonus shares

Extra shares an issuer gives investors for investing early or in larger amounts, which lowers the effective price per share. #

Reg CF investment limits

Caps on how much a non-accredited investor may invest across all Reg CF offerings in 12 months, based on annual income and net worth. #

Restricted securities (Reg CF)

Reg CF securities generally cannot be resold for one year after purchase, except to the issuer, accredited investors, family members or in a registered offering. #

Testing the waters

Communications a company may use to gauge investor interest before or during an offering, subject to SEC rules and required legends. #

Bad actor disqualification

SEC rules barring an offering from using Reg CF, Reg A or certain Reg D exemptions if the company or certain related people have specified past securities violations or convictions. #

Rolling close

A process that lets an issuer accept funds in stages once its minimum target is met, rather than waiting until the offering ends. #

SEC EDGAR

The SEC's public database of company filings, where anyone can read a company's Form C, Form 1-A, offering circular and ongoing reports for free. #

Section 17(b)

A provision of the Securities Act of 1933 requiring anyone who publishes content about a security in exchange for compensation to disclose the fact, amount and source of that compensation. #

Last reviewed: October 20, 2026. Dollar thresholds should be confirmed against current SEC rules.