The Reg CF $5M Cap Is Under Review — What the Push to $20M Means for Your Raise

The SEC’s Small Business Forum just voted to quadruple the Reg CF limit. Here’s what’s actually changing, what’s not, and how to structure your raise right now.

By Jose Ruiz, Space Funding  |  Wednesday, November 5, 2026

Five years ago the SEC raised the Reg CF annual limit from $1.07 million to $5 million. It was the biggest update to equity crowdfunding rules since the JOBS Act. Founders celebrated. Platforms scaled. And thousands of companies raised capital from their own communities in a way that was not possible before.

Now $5 million is starting to feel like a ceiling. In March 2026, the SEC’s 45th Annual Small Business Forum ranked raising the cap to $20 million as its number one recommendation. The report landed in Congress in July. And a formal petition from industry participants asked for the same thing in January.

Nothing is law yet. But the direction is clear. And how you structure a raise today determines whether you are positioned to benefit from what comes next — or locked out of it.

Today’s breakdown:

• What the current Reg CF $5M cap actually lets you do — and what it blocks
• The $20M petition: who filed it, what it says, and where it stands
• Reg CF vs. Reg A+ vs. Reg D: the honest side-by-side comparison
• The stacking strategy: how to use Reg CF and Reg A+ together
• How to structure your raise right now while the rules are in flux
• FAQ: 5 questions investors and founders are asking most

THE CURRENT STATE

REG CF TODAY

What is the current Reg CF funding limit?

The current Reg CF limit is $5 million per 12-month period. The SEC raised it from the original $1.07 million cap in March 2021 under amendments to Regulation Crowdfunding. That original $1.07 million figure dated back to the JOBS Act of 2012 and was widely seen as too low for most serious raises.

Here is what the current $5M cap allows:

• Raise up to $5 million in any rolling 12-month window
• Accept investments from both accredited and non-accredited investors
• Use an SEC-registered crowdfunding portal (Wefunder, StartEngine, Republic, and others)
• File a Form C with the SEC and update it as material facts change
• No state-level Blue Sky registration required

And here is what it blocks:

• You cannot raise more than $5M in a 12-month window under Reg CF alone
• You must use a registered intermediary — you cannot run the raise off your own website
• Non-accredited investor contribution limits apply (based on income or net worth)
• No advertising of the specific terms before filing the Form C

Source: SEC.gov Regulation Crowdfunding final rules (March 2021)

THE $20M PUSH

REGULATION UPDATE

Is the SEC raising the Reg CF cap to $20 million?

Not yet — but it is moving in that direction. At the SEC’s 45th Annual Small Business Forum held March 9, 2026, participants voted to raise the Reg CF cap to $20 million as the single most important recommendation for the year. That report was transmitted to Congress in July 2026.

Separately, in January 2026, a formal petition was filed with the SEC asking for the same $20 million cap. The petition cites the growth of the equity crowdfunding market since 2021, inflation erosion of the $5M ceiling, and the fact that Reg A+ — with its much higher compliance costs — is currently the only path for companies that want to raise between $5M and $75M from non-accredited investors.

Key facts about where this stands:

• The $20M figure comes from forum participant votes — it is a recommendation, not a proposed rule
• Reaching $20M may require an act of Congress, depending on how the SEC reads its current rulemaking authority
• No proposed rule has been published as of this writing
• The SEC’s Office of General Counsel is still evaluating whether $20M can be reached via rulemaking or only via legislation
• Industry consensus: some increase — to at least $10M — is likely within 12–18 months

Why this matters for founders today: If you are planning a raise in the $3M–$5M range, the current rules work for you now. But if your 12-month target is $6M–$15M, you currently have no clean path under Reg CF. You are either capped at $5M, or you need the time and compliance cost of Reg A+. A limit increase changes that equation entirely.

Sources: SEC 45th Annual Small Business Forum report (July 2026); angelinvestorsnetwork.com

THE COMPARISON

SIDE-BY-SIDE

What is the difference between Reg CF and Reg A+?

Reg CF is the fast, lower-cost path. Reg A+ is the larger, slower, more expensive path. Both allow non-accredited investors. That is where the similarity ends.

The practical takeaway: if you are a pre-revenue or early-stage company with strong community, Reg CF is the right starting exemption. Lower cost, faster launch, and built-in investor acquisition from the platform audience. Reg A+ makes sense when you have proven revenue, are targeting a $15M+ round, and have the capital to fund the qualification process up front.

As we covered in a previous issue, the CF-to-A+ stacking strategy is how Brew Dr. Kombucha went from $1.07M community raise to a Nasdaq IPO.

THE STACKING STRATEGY

RAISE ARCHITECTURE

Can I use Reg CF and Reg A+ together?

Yes — and the data shows it is the most effective capital formation strategy available to non-VC-backed companies. The Reg CF round builds your investor base. The Reg A+ round lets that base grow.

Stage 1 — Reg CF ($500K to $5M): Run the raise on Wefunder, StartEngine, or Republic. Target your existing customer base and email list first. Typical conversion: 2%–4% of your list becomes investors at $250–$1,000 average check. These investors become your most vocal advocates.

Stage 2 — Reg A+ Tier 2 ($5M to $75M): Launch 6–12 months after the Reg CF closes. Your Reg CF investors receive first notification. Historical reinvestment rates for Reg CF investors in the same company’s Reg A+ round run at 30%–45%. This is not organic — it is the direct result of investor relationships built in Stage 1.

Stage 3 — IPO, secondary, or strategic acquisition: A proven public investor base and audited financials (required for Reg A+) put you in a materially stronger position for any institutional or public market outcome.

One important caveat: you cannot run a Reg CF and a Reg A+ offering simultaneously to the same investors. The raises must be sequential, not concurrent.

If the $20M cap passes: This two-stage structure collapses into one. A company could raise $20M under Reg CF alone, skipping the $50K–$150K qualification cost and 3–6 month Reg A+ timeline entirely. That is the real disruption the cap increase would create.

HOW TO RAISE RIGHT NOW

FOUNDER PLAYBOOK

How to structure your equity crowdfunding raise while the rules are in flux

Rules in transition create optionality for founders who plan ahead. Here is the five-part framework Space Funding uses with active campaign clients:

1. Set your 12-month raise target before choosing your exemption. If your real capital need is $3M–$5M, Reg CF covers it today. If it is $6M–$15M, you face a gap in the current rules. Either structure two sequential raises or start your Reg A+ qualification process now so you have it ready when the Reg CF cap is still pending.

2. Build your investor list before you file. Platform audience alone rarely closes a Reg CF. The campaigns that hit their targets in 30–45 days bring their own warm investor traffic. Email list, customer database, social following — every one of these is a pre-raise asset. Unlike platforms like Wefunder or StartEngine that keep your investor data inside their systems, working with an investor acquisition partner that builds and owns the list on your behalf changes the economics of the raise.

3. Structure securities for the cap increase scenario. If you are issuing SAFEs or simple preferred equity under Reg CF, structure your cap table so a future Reg CF or Reg A+ raise does not create messy dilution. Discuss with your securities attorney how a cap increase would affect your existing investor agreements.

4. Do not wait for $20M to start. The market does not pause for legislation. Companies that start building investor relationships now will have a larger, warmer investor base whenever the new rules land. The ones waiting for better rules will be launching cold campaigns into a more crowded market.

5. Know what your broker-dealer relationship costs you. Most Reg CF platforms charge 5%–8% in cash plus equity. A registered broker-dealer structure separate from the platform can reduce total success fees and preserve more equity. This matters more at higher raise sizes — which is exactly where the cap increase takes you.

FREQUENTLY ASKED QUESTIONS

What is the current Reg CF funding limit?

$5 million per 12-month period. The SEC raised it from $1.07 million in March 2021. Under the current rules, no company can raise more than $5M in a single 12-month window using Reg CF, regardless of demand.

Is the SEC raising the Reg CF cap to $20 million?

It is a formal recommendation, not yet a rule. The SEC’s 45th Annual Small Business Forum voted it their top priority. A petition also went to the SEC in January 2026. Whether reaching $20M requires Congressional action or SEC rulemaking alone is still being evaluated. No proposed rule has been published as of November 2026.

What is the difference between Reg CF and Reg A+?

Reg CF: up to $5M, both accredited and non-accredited investors, no SEC pre-qualification, costs $10K–$30K to launch, live in 3–6 weeks. Reg A+: up to $75M, both investor types, full SEC qualification required, costs $50K–$150K+, takes 3–6 months to launch. Both allow general solicitation. Reg A+ requires audited financials.

Can I use Reg CF and Reg A+ together?

Yes, sequentially. Many companies run a Reg CF first to build a community investor base, then follow with a Reg A+ raise. Investors from the first round reinvest at higher rates in the second. You cannot run both simultaneously to the same investors. The raises must be sequential.

What happens to my Reg CF raise if the $20M limit passes?

If the cap increases, companies currently forced into Reg A+ for raises between $5M and $20M would have a lower-cost, faster path available. This would likely shift significant deal flow away from the Reg A+ market toward Reg CF. Existing Reg CF raises are not retroactively affected. New raises launched after a cap change can use the higher limit.

Ready to Raise Capital From Your Community?

Space Funding has facilitated $210M+ across 350+ campaigns. We help founders structure, launch, and fill Reg CF and Reg A+ raises — with investor acquisition built in. Whether you are raising $500K or $5M, we have the platform, the audience, and the playbook.