The basics
What is equity crowdfunding, and how does it work in 2026?
Equity crowdfunding is when a private company sells shares, or rights to future shares, to the public through a regulated online platform, often for small sums each. As of 4 Nov 2026 it runs under separate rules in the US, the UK, the EU, Canada and Australia, with up to US$5m a company in 12 months under the US's Reg CF, and what you buy is high-risk and hard to sell, so you may lose all the money you invest.
Not investment advice. Early-stage investing is high-risk and illiquid; you may lose all the capital you invest.
| Rules | Where | Most a company can raise | What limits a retail investor | Live raises we track | Source |
|---|---|---|---|---|---|
| Reg CF | US | US$5m in 12 months | If not accredited: US$2,500, 5% or 10% of income or net worth, by how much you have, up to US$124,000 in 12 months across all offerings | 416 | SEC (opens in a new tab) |
| Reg A+ | US | US$75m in 12 months, on Tier 2 | Tier 2, if not accredited: 10% of the greater of income or net worth, unless the securities are listed | 90 | SEC (opens in a new tab), 17 CFR 230.251 (opens in a new tab) |
| FCA rules | UK | Public offers under £5m are exempt; larger ones off-market go through an FCA-authorised public offer platform | No pound limit. You certify as high net worth, sophisticated or restricted, and a restricted investor states a limit of 10% of net assets | 15 | FCA COBS 4.12A (opens in a new tab), PS25/10 (opens in a new tab) |
| ECSPR | EU, and the EEA since August 2026 | €5m in 12 months | No fixed limit. Extra steps above the higher of €1,000 or 5% of net worth in one offer | 20 | Regulation (EU) 2020/1503 (opens in a new tab), EFTA (opens in a new tab) |
| CSF | Australia | A$5m in 12 months | A$10,000 per company in 12 months | 6 | ASIC (opens in a new tab) |
| NI 45-110 | Canada | C$1.5m in 12 months | C$2,500 per offering, or C$10,000 with a registered dealer's advice | 5 | NI 45-110 (opens in a new tab) |
How does equity crowdfunding work?
The steps are much the same in each country, though the names differ. A company sells through a licensed platform and publishes a set disclosure. In the US, for example, each offering runs on one online platform (opens in a new tab), operated by a broker-dealer or funding portal registered with the SEC and FINRA.
- The company publishes its offer. It sets out the business, the terms and how the money will be used. That document is a Form C (opens in a new tab) in the US, a key investment information sheet (opens in a new tab) in the EU and a Form 45-110F1 (opens in a new tab) in Canada.
- Investors commit money. You sign up on the platform and choose an amount, within any limit that applies to you, while the offer is open. How to read a Form C in 10 minutes walks through the US document.
- You get a short time to change your mind. In the US you can cancel until 48 hours before the deadline (opens in a new tab). The EU gives a non-sophisticated investor four calendar days (opens in a new tab), Australia a retail investor five business days (opens in a new tab), and Canada two business days (opens in a new tab). In the UK a first-time client of a firm waits 24 hours (opens in a new tab) before seeing the offer.
- The raise closes, or the money goes back. A company states a target and a deadline. If a US offering is not completed, the platform has five business days (opens in a new tab) to tell investors and direct the return of their money. In Canada a raise cannot close (opens in a new tab) below its stated minimum.
- You hold what you bought. The company carries on as a private company, and you wait. A US company that raised this way files an annual report on Form C-AR (opens in a new tab).
What do you actually buy?
Not always a share. Australia's regime is for ordinary shares (opens in a new tab), but a US raise can sell (opens in a new tab) common or preferred stock, straight or convertible debt, or a SAFE, which the SEC chose not to prohibit (opens in a new tab) in 2020. In the SEC's words, the owner of a SAFE does not have an ownership interest (opens in a new tab) in the company unless a triggering event, such as a later equity round or a sale, occurs and converts it into equity. SEC staff add that debt and SAFEs (opens in a new tab) generally carry no voting rights.
So the first question about any offer is what the security is, and what has to happen for you to be paid. SAFE vs equity vs convertible note in crowdfunding sets the three side by side.
How is it different from donation or rewards crowdfunding?
Those give you no stake in the business. The FCA describes donation-based crowdfunding (opens in a new tab) as aimed at furthering a cause rather than producing a financial return, and rewards-based as being for a specific benefit in a product, where backers are contributors rather than investors. Investment-based crowdfunding is the kind it regulates alongside loan-based, in which you buy shares or invest in business-backed loans.
The word covers more than equity elsewhere too. Of the EUR 4.25bn raised through EU crowdfunding platforms in 2024, ESMA counts (opens in a new tab) 58% as loan-based and 23% as debt-based, and only 12% as equity-based.
Who can invest, and how much?
Retail investors can take part under all of these regimes, within limits that depend on where the platform is. In the US the limit depends on your income and net worth (opens in a new tab) and applies only if you are not accredited: Reg CF investment limits for 2026 works through it. The EU sets no fixed cap (opens in a new tab) but adds a knowledge test and a loss simulation: ECSPR explained covers those.
Most regimes cap the raise as well. A company can raise up to US$5m in 12 months under Reg CF (opens in a new tab), US$75m in 12 months on Reg A+ Tier 2 (opens in a new tab), €5m in 12 months under ECSPR (opens in a new tab), A$5m in 12 months under CSF (opens in a new tab) and C$1.5m in 12 months under NI 45-110 (opens in a new tab). A retail investor is held to US$2,500, 5% or 10% of income or net worth, up to US$124,000 in 12 months (opens in a new tab) under Reg CF, A$10,000 per company in 12 months (opens in a new tab) under CSF and C$2,500 per offering, or C$10,000 with a registered dealer's advice (opens in a new tab) under NI 45-110, and ECSPR adds extra steps above the higher of €1,000 or 5% of net worth (opens in a new tab) in one offer.
Where you live matters as well as where the company is, as platforms differ on whom they accept: Can non-US residents invest on Wefunder, StartEngine and Republic? looks at the largest US names. Minimums vary by platform and by offer, and our platform directory lists those we track.
How big is equity crowdfunding in 2026?
In the US the market is ten years old. The SEC counts 9,851 Reg CF offerings (opens in a new tab) from May 2016 to the end of June 2026, with US$1,644m reported raised, a figure it calls a likely lower bound. In the EU, ESMA found (opens in a new tab) that 181 active providers raised money in 2024, that 88% of investors were retail, and that the average retail investor put in around EUR 660.
Right now we track 713 live raises on 26 platforms in 12 countries.
What changed in 2026?
The UK's rules moved most. A new public offers regime came into force on 19 January 2026 (opens in a new tab): off-market public offers of £5m or more directed at a broad range of investors must now go through an FCA-authorised public offer platform, while offers below £5m stay exempt.
In the US the cap is still US$5m. A petition docketed by the SEC in July 2026 (opens in a new tab) asks it to raise that to US$20m and index it to inflation. The SEC's page for the petition lists submissions and public comments and no decision, as last updated on 9 October 2026, so this is a request and not a rule.
What are the risks?
The FCA calls investment-based crowdfunding a high-risk investment (opens in a new tab), and the other regulators' warnings run along the same lines.
- You can lose everything. The FCA's words are that you might lose all the money you have invested (opens in a new tab) if the company fails.
- No compensation scheme stands behind it. The FCA says UK investors won't have access to the FSCS (opens in a new tab), and EU investments are not covered (opens in a new tab) by deposit guarantee or investor compensation schemes.
- A regulator has not approved the offer. An EU information sheet must open by saying the offer has been neither verified nor approved (opens in a new tab) by the authorities or ESMA.
- It is hard to sell. US crowdfunding securities generally cannot be resold for a year (opens in a new tab), and in the UK only some platforms (opens in a new tab) offer a way to sell at all.
- The price is hard to judge. The SEC notes the challenges of valuing a company (opens in a new tab) early in its life cycle, and a SAFE generally states no valuation when it is issued.
The best base rates we know of are UK figures from one data provider, not a regulator. Beauhurst (opens in a new tab) found that of UK crowdfunding rounds from 2011 to 2021, 6% went to companies that have since exited, 18% to companies that moved to a later stage, 57% to companies that stagnated and 20% to companies that have gone under. They add to 101% as published, and they count rounds, not investors.
How do investors get their money back?
Usually only when the company is sold or lists, or when someone buys your holding on a secondary market, and nobody can promise when. An exit is also not the same as a gain: Beauhurst (opens in a new tab) counts the sale whatever it paid, so a holder can be in that 6% and still lose money. Our exits pages set out what crowd investors made and lost in named cases, with sources. How to sell crowdfunded shares covers the routes, and What happens to your shares when a crowdfunded company fails the other outcome.
How can you check an offer before you commit?
The disclosure says more than the pitch does. In the US the Form C (opens in a new tab) is public on SEC EDGAR, with financial statements whose level of outside review rises with the size of the offering. In the EU the information sheet sets out the risks and the terms (opens in a new tab) in a format the regulation lays down. How to evaluate a crowdfunding deal turns this into a checklist.
Frequently asked questions
Is equity crowdfunding legal?
Yes, under the rules in the table above, through a platform that holds the right registration or licence. In the US that means a broker-dealer or funding portal (opens in a new tab) registered with the SEC and FINRA.
Do you have to be accredited or wealthy?
No. Reg CF is open to people who are not accredited, within limits (opens in a new tab) set by income and net worth. Those limits fall away for accredited investors.
Is there tax relief?
In the UK, some companies qualify for EIS or SEIS, which give income tax relief of 30% and 50% (opens in a new tab) up to annual limits. EIS and SEIS on Crowdcube and Republic Europe covers how that works.
Can you sell your shares whenever you want?
No. US crowdfunding securities generally cannot be resold for one year (opens in a new tab), with some exceptions. How to sell crowdfunded shares covers what comes after that.
Does Raise Sonar sell these investments?
No. We are an information service, and investments are made on the platforms in our directory.
Sources
- SEC, Regulation Crowdfunding: guidance for issuers (opens in a new tab)
- SEC staff, Report to the Commission: Regulation Crowdfunding, 2019 (opens in a new tab)
- 17 CFR 227.304, cancelling and returning funds (opens in a new tab)
- SEC, Regulation Crowdfunding offerings: statistics to 30 June 2026 (opens in a new tab)
- SEC, rulemaking petition File No. 4-914, 13 July 2026 (opens in a new tab)
- SEC, Regulation A overview (opens in a new tab)
- 17 CFR 230.251, Regulation A's Tier 2 investor limit (opens in a new tab)
- SEC, Cutting through the jargon: a glossary (opens in a new tab)
- SEC, Release 33-10884, November 2020 (opens in a new tab)
- FCA, Understanding crowdfunding (opens in a new tab)
- FCA Handbook, COBS 4.12A (opens in a new tab)
- FCA, PS25/10: final rules for public offer platforms (opens in a new tab)
- Regulation (EU) 2020/1503 on crowdfunding service providers (opens in a new tab)
- EFTA, the regulation in the EEA Agreement (opens in a new tab)
- ESMA, Market Report: Crowdfunding in the EU 2025 (opens in a new tab)
- ASIC, Crowd-sourced funding (opens in a new tab)
- Corporations Act 2001 (Australia), Part 6D.3A (opens in a new tab)
- National Instrument 45-110, consolidated (opens in a new tab)
- HMRC, Venture capital schemes: tax relief for investors (opens in a new tab)
- Beauhurst, The State of UK Equity Crowdfunding, 30 January 2025 (opens in a new tab)