Reg CF Raise Limits: How Your Financials Set the Ceiling

In Regulation Crowdfunding, your financial statements do not just support the offering. They help determine how much you can legally raise. If you file Form C with only principal-executive-officer-certified financials, your ceiling is low; if you want more room, you may need reviewed or audited financials.

This is an issuer-side rule. It is not the separate question of how much an individual investor may invest under Reg CF.

In Reg CF, the financial-statement tier is not a disclosure detail. It is part of the raise limit.

What actually determines how much you can raise under Reg CF?

The financial-statement tier in your Form C generally depends on two things:

• whether your company has ever previously sold securities in a Reg CF offering, and
• how much your company has sold under Reg CF in the last 12 months, plus how much this offering may sell in that same rolling 12-month window.

That is why founders should plan around the highest amount the offering might accept, not just the minimum target. In practice, the filed financials set the highest amount your current Form C can support.

The SEC adjusts Reg CF dollar thresholds periodically for inflation. The figures below reflect the thresholds used in this article, but you should confirm current amounts before launching.

Current Reg CF financial-statement tiers

Financial-statement level	If the company has never previously sold securities in a Reg CF offering	If the company has previously sold securities in a Reg CF offering
Financial statements certified by the principal executive officer, plus required tax-return information if filed and required	Up to $124,000	Up to $124,000
Reviewed financial statements by an independent public accountant	More than $124,000 up to $1,235,000	More than $124,000 up to $618,000
Audited financial statements	More than $1,235,000 up to $5,000,000	More than $618,000 up to $5,000,000

For most U.S. issuers, the Form C financial statements are generally prepared in accordance with U.S. GAAP. What changes across these tiers is the level of certification or accountant involvement: management-certified, reviewed, or audited.

One terminology point matters here. Founders often say “self-compiled” financials. That is not the Reg CF term. The lowest tier is financial statements certified by the company’s principal executive officer. A CPA compilation is a different service.

First-time vs. repeat issuer: why one old Reg CF raise can still matter

Founders often mix up two separate questions:

1. Have you ever previously sold securities in a Reg CF offering?
2. How much Reg CF have you sold in the last 12 months?

The first question determines whether you are treated as a first-time or repeat Reg CF issuer for the financial-statement rule. If your company has previously sold securities in reliance on Reg CF, you are generally no longer treated as a first-time issuer for this purpose, even if that earlier raise happened more than 12 months ago.

That is why reviewed financials can generally take a first-time issuer up to $1,235,000, but only take a repeat issuer up to $618,000.

A prior Reg CF raise can matter long after it stops counting against your 12-month cap.

How the rolling 12-month rule works

Reg CF also has an overall issuer cap of $5,000,000 in any rolling 12-month period. If you already sold securities in a Reg CF offering within the last 12 months, that amount reduces what you can raise now.

The key point is that the earlier raise affects more than just remaining capacity. It can also push the new offering into a higher financial-statement tier.

• Remaining Reg CF capacity = $5,000,000 minus the amount already sold under Reg CF in the last 12 months.
• Required financial-statement tier = based on the total amount already sold under Reg CF in the last 12 months plus the highest amount this offering may sell, together with your first-time or repeat issuer status.

The 12-month period is rolling. It does not reset on January 1.

A prior Reg CF raise can affect you twice: it can make you a repeat issuer, and it can use up part of your current 12-month capacity.

How founders should choose the right tier before filing

A simple way to analyze the issue is:

1. Start with the maximum amount you may want to accept in this offering, not just the minimum target.
2. Add any amount already sold under Reg CF in the last 12 months.
3. Ask whether the company has ever previously sold securities in a Reg CF offering.
4. Use the financial-statement tier that supports that full amount.

If there is a real chance the campaign could cross a threshold, plan for that threshold before filing. Filing with the wrong level of financial statements can create avoidable compliance, timing, and closing problems.

This article focuses on the tier framework, not every detail of which financial statements and periods are required. Those details can vary based on the company’s age, fiscal year-end, and other facts.

Examples

Scenario	Total Reg CF amount in the rolling 12-month period	What financials generally support that amount
Brand-new company, no prior Reg CF sales, wants to raise $100,000	$100,000	Principal-executive-officer-certified financials, plus required tax-return information if filed and required
Brand-new company, no prior Reg CF sales, wants to raise $900,000	$900,000	Reviewed financial statements
Company sold $500,000 in a Reg CF offering 6 months ago and now wants to sell another $100,000	$600,000	Reviewed financial statements may still be enough, but the company is now a repeat issuer
Same company sold $500,000 6 months ago and now wants to sell another $250,000	$750,000	Audited financial statements, because a repeat issuer generally cannot go above $618,000 on reviewed financials
Company sold $4,400,000 in Reg CF 9 months ago and now wants to raise another $1,000,000	$5,400,000 if fully sold	It does not have $1,000,000 of current Reg CF room left. Only $600,000 of current capacity remains until enough of the earlier sales roll out of the 12-month window. An audit would also generally be required.

Common mistakes

• Using the minimum target instead of the maximum amount the offering may accept.
• Looking only at the new campaign and ignoring Reg CF sales from earlier in the year.
• Assuming an old Reg CF raise no longer matters at all once it is outside the 12-month window. It may no longer count against current capacity, but it can still make you a repeat issuer.
• Confusing principal-executive-officer-certified financials with a CPA compilation.
• Mixing up the issuer-side raise cap with investor investment limits.

What investors can learn from the financial-statement tier

The financial-statement tier tells you something about how much third-party scrutiny sits behind the numbers, but it does not tell you whether the business is good.

• Principal-executive-officer-certified financials are management-certified numbers. There is no review or audit opinion behind them.
• A review by an independent public accountant provides limited assurance.
• An audit is more extensive than a review, but it is still not a guarantee that the company is healthy or that the investment is sound.

A low-tier offering is not automatically a bad offering. Early-stage companies often use the lightest tier the law allows because reviews and audits take time and cost money. But investors should understand what level of verification they are looking at.

For diligence, one practical question is whether the current raise amount, together with prior Reg CF sales in the last 12 months, would normally require reviewed or audited financials. Prior Form C filings and amendments are public on the SEC’s EDGAR system.

FAQ

Does the Reg CF 12-month clock reset every calendar year?

No. It is a rolling 12-month period, not a January-to-December reset.

If we did a Reg CF raise more than 12 months ago, are we still a repeat issuer?

Generally, yes. A prior Reg CF sale can still make you a repeat issuer for the financial-statement rule even after it no longer counts against your current 12-month capacity.

Can we file with lower-tier financials and upgrade later if demand is strong?

Do not assume that is a clean workaround. If the offering may cross a threshold, it is usually better to plan for the higher tier before launch. If demand could push you over a threshold, coordinate with counsel and your funding portal before accepting amounts above what the filed financials support.

Do other exemptions, like Rule 506(b) or Rule 506(c), use this same ladder?

No. This financial-statement ladder is specific to Regulation Crowdfunding. Other exemptions have different disclosure rules, even though running offerings under multiple exemptions can raise separate structuring and compliance issues.

Is a review the same as an audit?

No. A review provides limited assurance. An audit is a deeper examination and generally supports higher Reg CF raise amounts.

What is the practical rule of thumb for founders?

Choose your financial-statement tier based on the highest amount you may accept under Reg CF in the rolling 12-month window, not just the amount you hope to close quickly.

The bottom line

In Reg CF, your Form C financials are not just paperwork. They help set the practical ceiling for the offering.

If you have never previously sold securities in a Reg CF offering, reviewed financials can generally support up to $1,235,000, and audited financials are generally required above that. If you are a repeat Reg CF issuer, reviewed financials generally only support up to $618,000, and audited financials are generally required above that. In both cases, any amount already sold under Reg CF in the last 12 months reduces what is left under the $5,000,000 cap.

If you are near a threshold, changing your raise size, or running Reg CF alongside another exemption, get securities counsel involved early. The cheapest time to fix a threshold problem is before you file.