Crowdfund Capital Advisors' $20 million Reg CF cap petition draws mostly supportive comments

Shane Liddell's own figures describe the market both camps are arguing over. He cites Commission data showing roughly 8,492 offerings by about 7,134 issuers since May 2016, with median targets of $500,000 to $800,000 and most campaigns aiming below $1 million ^[14]. Those medians are 10% to 16% of today's $5 million cap, and 2.5% to 4% of the proposed one ^[1]. The typical campaign never touches the limit. Liddell's summary of the data does not say how many did ^[14].

The letters in favor are about the issuers at the top of that range. Glenn Burney, who invests on Wefunder, StartEngine, Republic and other portals, describes retail backers who fund a company early and then lose access once it outgrows the cap ^[12]. Justin Starbird, CEO of The Aebli Group, calls the cap an artificial stop for capital-intensive companies that need more than $5 million to reach commercialization ^[7]. The same Commission data imply about 1,358 offerings, roughly 16% of the total, were an issuer's second or later raise, a count that includes small repeat raises as well as large ones ^[2].

Several supporters have a stake in bigger deals. Starbird's firm runs investor communications for Reg CF issuers ^[7]. Pierce Leonard, who has placed D&O insurance on Reg CF, Reg A and Reg D 506(c) deals since 2020, said a higher cap could grow the market he serves ^[9]. Tom Wright, an angel investor with stakes in 151 startups, wants room to put more money into raises that hit the limit ^[8]. Liddell argues the change helps portal economics more than investor outcomes ^[15]. At the 7% fee he uses, a portal earns $350,000 on a full raise today and $1.4 million on a full raise under the petition ^[3].

On disclosure, the supporters and the lone opponent are closer than the tally suggests ^[6]. Leonard wants Form C to state whether an issuer raising more than $5 million carries D&O cover that responds to securities claims, and the limit of that cover ^[10]. Liddell's fallback, if the SEC changes anything, is a smaller increase backed by data, plus tighter financial-statement, use-of-proceeds and valuation disclosure, with separate treatment for first-time and later-stage issuers ^[16].

The SEC could grant the full $20 million with the inflation indexing that Starbird, Leonard and Burney requested ^[7][9][12]. It could adopt something close to Liddell's fallback ^[16], or leave the cap where it is. Precedent leans toward movement. The proposed fourfold rise is smaller than the roughly 4.9-fold increase of the last Trump administration ^[5], and Crowdfund Insider describes the current Commission as pro-capital formation ^[18]. I think a higher limit reserved for later-stage issuers, carrying the extra disclosure Leonard and Liddell each describe, is the outcome most likely to survive comment ^[10][16].

The strongest case against that view is the accredited-investor change. Crowdfund Insider notes that recent revisions to the Accredited Investor definition will let Reg D offerings reach more retail investors and could cool interest in moving the Reg CF cap ^[19]. If they work as described, Burney's early backers could follow a company into its Reg D round without any change to Reg CF ^[12][19]. A count showing that few campaigns ever reached $5 million would weaken the petition further ^[14].