Completely different process for the two sorts of offering.

In a Reg CF offering, the Form C is filed with the SEC and the moment it shows up on the EDGAR system, the issuer can start accepting investment commitments on the intermediary's site. The SEC does not review or sign off in any way. That doesn't mean they (and other regulators) aren't looking, though!

In a Reg A offering, the SEC must review and "qualify" the offering before it goes live. (We don't use the term "approve"; the SEC never approves or blesses offerings.) If it's a Tier 1 Reg A offering, the states that the offer will be made into also have to sign off.

In both cases, you can "test the waters" before filing or qualification, but any materials you use to test the waters need to be filed with the SEC.

It can depend on the specific circumstances of the equity crowdfunding round and the company's performance since then. In general, investors may view a company that has successfully completed an equity crowdfunding round as a good thing because it can indicate that the company has a strong base of supporters and has been able to raise capital in the past. Additionally, a company that has completed an equity crowdfunding round will have a track record of financial performance and investor relations, which can be viewed positively by potential investors.

On the other hand, if a company has struggled to meet its financial projections or has had difficulty maintaining good relations with its investors, this could be viewed negatively by potential investors. Additionally, a company that has completed multiple rounds of equity crowdfunding without showing significant progress or growth could also be viewed as a red flag.

It's important to note that each company is unique, and the success or failure of one company's equity crowdfunding campaign should not be used as a definitive indicator of future performance. Potential investors should always conduct their own due diligence on any company before investing.

Regulation A+ (Reg A+) is a set of rules and regulations put in place by the Securities and Exchange Commission (SEC) that allows small and medium-sized companies to raise funds from a large number of investors through a mini-IPO process. Reg A+ is an update to the existing Regulation A, which was adopted under the JOBS Act.

Reg A+ allows companies to raise up to $75 million in a 12-month period from both accredited and non-accredited investors, and it allows the securities to be sold to the public, which differs from Regulation Crowdfunding (Reg CF) which has a cap of $5 million in a 12-month period.

The process of Reg A+ is similar to a traditional IPO, but it is less costly and less burdensome for companies, with fewer disclosure requirements and ongoing reporting obligations, but it still requires the companies to file an offering statement with the SEC, and the SEC will review the statement to ensure compliance with the rules and regulations.

Reg A+ is seen as a way for smaller companies to access the public markets, by providing an alternative to traditional IPOs and Reg D, which are typically only available to larger, more established companies. Reg A+ also allows companies to test the waters and gauge investor interest before committing to a full-scale IPO.

In summary, Reg A+ is a new regulation that allows smaller companies to raise capital from a large number of investors through a mini-IPO process, by complying with certain rules and regulations set by the SEC. It allows companies to raise more capital than Reg CF and it has fewer disclosure requirements and ongoing reporting obligations than a traditional IPO. 

Regulation Crowdfunding (Reg CF) and Reg CF are the same thing, Reg CF refers to Title III of the JOBS Act, which is also known as Regulation Crowdfunding. It is a set of rules and regulations put in place by the Securities and Exchange Commission (SEC) that allows small businesses and startups to raise funds from a large number of investors through crowdfunding platforms.

Regulation Crowdfunding allows companies to raise up to $5 million in a 12-month period from both accredited and non-accredited investors, via crowdfunding platforms that are SEC-registered intermediaries. The process of Reg CF is different from traditional fundraising methods, such as IPOs, venture capital, and angel investing, as it allows companies to raise money from a large number of small investors through online platforms.

Reg CF is a relatively new regulation and it has provided small businesses and startups with a new way to raise funds, by allowing them to tap into a large pool of potential investors. This has also opened up investment opportunities for smaller investors who may not have been able to participate in traditional fundraising methods.

In summary, Reg CF and Regulation Crowdfunding are the same thing, it's the legal framework that allow companies to raise funds from a large number of investors through crowdfunding platforms, by complying with certain rules and regulations set by the SEC.

As someone who believed in the power of community and collective action to bring about change, I would likely see the benefits of crowdfunding and impact investing. These forms of financing allow individuals to pool their resources together to support causes and businesses that align with their values and beliefs.

Crowdfunding, in particular, has the potential to provide small businesses and startups, particularly those owned by minorities and disadvantaged communities, with access to much-needed capital. This can help to create jobs and stimulate economic growth in these communities, which is vital to achieving true equality and justice.

Impact investing, on the other hand, allows individuals to invest in businesses and projects that not only provide financial returns but also have a positive social and environmental impact. It is a way for people to use their financial resources to promote sustainable development and address pressing global issues such as poverty, climate change, and inequality.

I would also see the potential of crowdfunding and impact investing to provide a way for marginalized communities to take an active role in shaping the economy and society. It empowers people to use their financial resources to promote causes and businesses that align with their values and beliefs, instead of being passive recipients of charity.

In summary, I would see the benefits of crowdfunding and impact investing as a way for individuals to use their financial resources to promote economic justice, sustainable development and empower marginalized communities to shape their own future.

Great question! While we feel like we are about to enter into a heightened regulatory environment (due to FTX and similar), blockchain, crypto, NFTs and CBDCs will definitely innovate the space. Possibly not quite in 2023, but soon.

Because securities have heavy regulatory oversight (and that oversight has country borders) our prediction is that the focus will be on CBDCs (Central Bank Digital Currencies) as they act as a country's 'digital currency'. As more and more Equity Crowdfunding deals look to have global investors, these could play a key role.

What are CBDCs?

Central Bank Digital Currencies (CBDCs) are digital tokens, similar to cryptocurrencies that are essentially the digital equivalent of the country’s currency. Over 100 countries are currently experimenting with CBDCs, and some have even implemented them.

Essentially, CBDCs can play a key role in draining unnecessary intermediaries from the existing financial system into the digital realm. Besides reducing economic friction by reducing counterparties needed in payments, trade, and banking, the technology can slash financial services costs for consumers and enterprises alike by facilitating trusted, direct connectivity between transacting parties. 

There is less risk when compared to NFTs or crypto, where almost anyone with a computer can build a 'coin' and add it to a wallet.

In the United States, companies looking to raise funds through crowdfunding must comply with the rules and regulations set forth by the Securities and Exchange Commission (SEC) in Regulation Crowdfunding. Some of the requirements for companies include:

- The company must be organized in and have its principal place of business in the United States.
- The company must provide certain disclosures to the SEC and to potential investors, including financial statements and information about the management team and the business.
- The company may only raise a certain amount of money in a 12-month period, currently $5 million
- The company must use an SEC-registered intermediary, such as a broker-dealer or a funding portal, to conduct the crowdfunding offering.
- The company must also provide certain investor protection measures, such as allowing investors to cancel their investment commitments within a certain period of time.
- The company must also make sure that their campaign adheres to anti-fraud regulations and that their investors are accredited or not.

It is important to note that these requirements and rules are subject to change and depending on the legislation of different countries the requirements may vary.

Investing in startups can be risky, and it is important for investors to carefully consider the pros and cons of different investment instruments. Some pros and cons of investing in startups via equity (common stock) versus a SAFE (simple agreement for future equity) instrument are:

Pros of investing in equity:

- The potential for high returns: If the startup is successful, investors may be able to earn significant profits through the sale of their equity or through dividends or other distribution of profits.
- Voting rights: Holders of common stock typically have voting rights in the company, which allows them to have a say in important decisions related to the company's direction and management.

Cons of investing in equity:

- High risk: Startups are high risk investments, and it is possible that the company may fail and investors may lose their entire investment.
- Dilution: As the company raises additional rounds of funding, the ownership stake of earlier investors may be diluted.

Pros of investing via a SAFE instrument:

- Simplicity: SAFE instruments are simpler and faster to execute than traditional equity financing documents, which can save time and legal fees.
- Flexibility: SAFE instruments can be customized to fit the specific needs of the company and the investor.

Cons of investing via a SAFE instrument:

- No ownership stake: SAFE instruments do not convey ownership in the company, so investors do not have voting rights or the potential for dividends or other profit distributions.
- Potential for low returns: If the company is successful and subsequently issues equity to investors, holders of SAFE instruments may receive less favorable terms than later investors who invest via equity.

Hi Ray,

Congratulations on your graduation from law school. I always recommend to someone new to investment crowdfunding to start by visiting a platform looking around, finding a company you like, and investing in the company. Experiencing a crowdfunding campaign as an investor is a significant first step. Going through the due diligence process reviewing the form C to get a better understanding of the required compliance and then experiencing the marketing and investor acquisition process reading campaign page updates, asking questions, reading the responses from the founders and reading your emails, attending founder webinars, and engaging the investor community with your questions and insights. This would be the first step in better understanding the process as an investor. I find the larger platforms do a great job of providing regulatory information for both investors and founders so digging into the FAQ section will provide some deep practical insights into the process. If you enjoy the process begin looking for your place in the industry connecting with the platforms and securities attorneys to learn that aspect of the business.