Regulated Investment Crowdfunding Glossary

An investor who meets specific income, net worth, or professional criteria, allowing them to invest in private markets beyond certain limits. Under Reg CF, non-accredited investors can also participate within certain investment limits, making Reg CF accessible to a wider audience.

The maximum amount an individual can invest in Reg CF offerings within a 12-month period. Limits vary based on the investor's annual income or net worth.

The public, online effort by a business or entity to raise funds through a Reg CF portal. The campaign includes the investment offering, detailed business information, financials, and the target funding goal.

A registered online platform where Reg CF offerings are made available to investors. These portals are registered with the SEC and are members of FINRA, acting as intermediaries between issuers and investors. The BioTech Funding Portal is a crowdfunding portal.

Specific information that issuers must provide to investors, such as financials, management structure, and risks. The SEC mandates these disclosures in Reg CF to help protect investors.

The regulatory document that an issuer must file with the SEC to initiate a Reg CF offering. It includes key information about the offering - business details, financial statements, risk factors, and use of funds.

A business or entrepreneur raising funds through a Reg CF offering. Issuers must meet eligibility requirements and follow SEC disclosure rules.

The upper limit of funds an issuer can raise in a Reg CF offering. It's typically set above the target offering amount and allows for overfunding within certain bounds.

An investor who does not meet the income or net worth criteria of an accredited investor but can still invest in Reg CF offerings, subject to specific investment limits.

A legal document detailing the terms of the securities offered, including information about the business, the securities, and the risks involved. In Reg CF, this document is typically included in the Form C filing.

A securities regulation that allows small businesses to raise capital from the general public, subject to certain limits and requirements. Introduced by the JOBS Act, Reg CF enables non-accredited investors to participate in private market investments.

The gain or loss generated by an investment, usually expressed as a percentage of the original investment amount. In equity crowdfunding, ROI may come from dividends, appreciation in value, or sale of shares - though returns are not guaranteed.

Despite the name, a "SAFE" investment does not guarantee protection of your principal. It is a contractual agreement where an investor provides funding in exchange for the right to receive equity at a future date - typically upon a qualifying financing event, acquisition, or liquidation.

Unlike traditional convertible notes, SAFEs typically do not accrue interest or have a maturity date. They are frequently used in crowdfunding and early-stage investments to simplify fundraising while deferring valuation negotiations. Terms may include valuation caps, discounts, or other conversion triggers.

For a more detailed discussion, visit our Educational Material.

The U.S. government agency responsible for enforcing federal securities laws and regulating the securities industry, including Reg CF offerings.

A third-party service responsible for keeping track of securities ownership records, including handling transactions, issuing new shares, and managing dividend payments. Transfer agents are optional for Reg CF issuers but can add transparency.

An estimate of a company's worth, often determined by financial metrics or comparable companies. Valuation is crucial for equity crowdfunding, as it sets the price per share for investors in the campaign.

Rights granted to shareholders that allow them to vote on important company matters, such as the election of board members or major business decisions. Not all securities offered under Reg CF provide voting rights.

Potential challenges and uncertainties that could negatively impact an issuer's business and financial performance. These must be disclosed to investors in Reg CF offerings to provide transparency.

The minimum amount of capital the issuer aims to raise during a Reg CF campaign. This is the funding threshold that must be reached for the offering to close successfully.