Can I use crowdfunding to raise money without violating securities laws in Delaware? What are the requirements?

Requirements for Crowdfunding in Delaware

To use crowdfunding to raise money in Delaware, you must comply with the federal securities laws. The Securities and Exchange Commission (SEC) regulates crowdfunding offerings under Title III of the JOBS Act ^[1].

Under these regulations, companies can raise up to $5 million in a 12-month period through crowdfunding. However, there are limits on the amount individual non-accredited investors can invest across all crowdfunding offerings in a 12-month period ^[1].

To comply with the Delaware Securities Act, any notice of appearance, written motion, brief, or other written communication must be served upon each party in the proceeding in accordance with the provisions of the act ^[2].

Conclusion

To use crowdfunding to raise money in Delaware, you must comply with the federal securities laws and the Delaware Securities Act. This includes limiting the amount individual non-accredited investors can invest across all crowdfunding offerings in a 12-month period and serving any written communication in accordance with the Delaware Securities Act.

Source(s):

• [1] Regulation Crowdfunding - SEC.gov
• [2] Rules Pursuant to the Delaware Securities Act

Jurisdiction

Delaware

• General