Investing Limits for Regulation Crowdfunding Startups
Regulation Crowdfunding became legal on May 2016. The SEC really made the investment limits super complicated.
- Everyone can invest at least $2,200
- If either your net worth or income are below $107k, you may legally invest a maximum of 5% of the lesser number.
- If both your net worth or income are above $107k, you may legally invest a maximum of 10% of the lesser number.
- No one may invest more than $107,000. Further, accredited investors are subject to the same investment limitations as everyone else, no matter how silly that is.
- Investment limits are for every 12 month period. Every other investment in a Regulation Crowdfunding offering counts towards the annual limit.
Investing Criteria for Reg D
Federal law only allows Accredited Investors to legally invest in startups using Regulation D 506. Accredited Investors have no limits.
- earn more than $200,000 per year, or a joint income of $300,000, in the last two years and expect the same this year.
- or, have a net worth exceeding $1 million not including their home
Investing Limits for Reg A+ Startups
Non-accredited investors may legally invest no more than 10% of their income or net worth - whichever is greater.
Accredited investors (those earning $200k+ or with net worth over $1m) have no investing limit.