An Introduction to the Federal Crowdfunding Exemption: Part 1

This lesson is the first part of a two-part introduction to the federal crowdfunding exemption from the registration requirement of the Securities Act of 1933. Before taking this lesson, students should have a basic understanding of the Securities Act of 1933 and its registration requirement.

The lesson provides links to the relevant regulatory provisions, but you might find it helpful to have your own copy of Regulation Crowdfund as you take the lesson. That regulation appears at 17 C.F.R. § 227.10 et seq. and is included in every statutory supplement published for securities regulation courses.

However, the crowdfunding exemption is long and complicated. This lesson does not attempt to cover every detail of the rules.

Learning Outcomes

On completion of the lesson (and the second related lesson), the student will be able to:

1. Apply the basic requirements of the exemption to determine if it is available to a particular offering.
2. Explain how crowdfunding offerings work.
3. Apply the offering amount limitation.
4. Explain which issuers are eligible to use the exemption.
5. Discuss and apply the restrictions applicable to crowdfunding investors.
6. Restate the limitations on crowdfunding intermediaries and how they must conduct offerings pursuant to the exemption.
7. Describe the disclosure requirements of the exemption.
8. Apply the resale restrictions applicable to crowdfunded securities.
9. Understand the protection available for insignificant deviations from the exemption's requirements.