Reg CF Explained

July 12, 2022

What is Regulation CF?

In the past, private companies could only raise capital from what are called “accredited investors” - which typically are made up of the wealthiest 2% of Americans. In 2012, President Obama signed a landmark piece of legislation called The JOBS Act, which allows entrepreneurs to publicly advertise that they are looking for investors pre-IPO. Four years after The JOBS Act was signed a new exemption called Regulation CF went into effect. This exemption allows private early-stage companies to raise money from all Americans. Equity crowdfunding was born - startups could now use equity crowdfunding to turn customers into investors and raise up to $5 million.

Reg CF is a great alternative to getting funding via traditional VC firms, which - in today’s market - seems to be drying up.

Bar graph showcasing the 23% global funding fall to $108.5B, which is the largest quarterly percentage drop in funding in nearly a decade.

 (Source: CB Insights, State of Venture, July 12, 2022)

Bar/line graph illustrating the 23.4% funding drop in 2nd quarter of 2022, as deal activity slows.

(Source: CB Insights, State of Venture Report, July 12, 2022)

Requirements for a raise via Reg CF

  • require all transactions under Regulation Crowdfunding to take place online through an SEC-registered intermediary, either a broker-dealer or a funding portal
  • permit a company to raise a maximum aggregate amount of $5 million through crowdfunding offerings in a 12-month period
  • limit the amount individual non-accredited investors can invest across all crowdfunding offerings in a 12-month period and
  • require disclosure of information in filings with the Commission and to investors and the intermediary facilitating the offering

Keep in mind…

All Regulation CF raises must occur entirely through a single SEC/FINRA registered broker-dealer or funding portal. In addition, a company must draft and file a Form C with the SEC before proceeding with their raise. Form C is a document the company must file with the Securities and Exchange Commission (“SEC”) which includes basic information about the company and its offering and is a condition for making a Reg CF offering available to investors. It is important to note that the SEC does not review Form C, and therefore is not recommending and/or approving any of the securities being offered.

In a nutshell, Reg CF governs transactions taking place online through an SEC-registered intermediary. These are usually Financial Industry Regulatory Authority-regulated broker-dealers or funding portals (like DealMaker Securities & DealMaker Tech). The directive stipulates how much a company can raise through crowdfunding in 12 months; in late 2020, an SEC action raised the ceiling to $5 million from the original $1.07 million. It also limits how much individuals can invest across all crowdfunding offerings in 12 months – between $2,200 and $107,000, depending on their financial resources.

At the very least, issuers have to file a Form C with the Securities and Exchange Commission disclosing:

  • bios of officers, directors, and owners of 20% or more,
  • a description of the issuer’s business,
  • the intended use of proceeds,
  • the method for determining the security’s price,
  • the target offering amount and deadline, and
  • a discussion of the issuer’s financial condition and financial statements.
  • There might be more requirements depending on how long the company has been in business and what its current revenue stream looks like.

While much of the capital raised via Reg CF is common stock, you can also go this route to issue preferred stock, debt, or hybrid securities. Foremost among these are simple agreements for future equity – or SAFEs – a form of convertible notes.

Eligibility

To be eligible for Reg CF issuance, your company would have to be U.S.-domiciled, in compliance with SEC, and have no current plans to engage in a merger or acquisition with an unnamed company. While that rules out going from crowdfunding directly to being merged into a SPAC, there is some good news here. Effective March 15, it will be in compliance to establish a special purpose vehicle for the expressed purpose of facilitating investment in Reg CF securities.

As always, this is directional only and you should speak to your advisor to make the best decision for your capital raise.

Monogram Case Study - DealMaker (Embed)

When VCs said no, Monogram turned to retail investors. That decision powered their rise from startup to publicly traded company—and even helped them raise an additional $13M privately after their Nasdaq debut.

Monogram at NASDAQ celebration

The Challenge: Raising Capital on Their Terms

The Challenge: Raising on Their Terms

Monogram Technologies was founded with a bold vision: to revolutionize orthopedic surgery with a robotic joint replacement system using custom 3D-printed joints. The market for this technology is massive—approximately $19.6 billion, with over 1 million knee replacements per year. But it's a capital-intensive, regulation-heavy space—and traditional VCs weren't biting.

Instead of compromising, co-founders Dr. Doug Unis and Ben Sexson went all-in on a different path: retail capital. Why?

  • Control and ownership: Not only were they able to raise the capital they needed to grow the business—they did it on their own terms.
  • Long-term asset: They wanted to build an army of true believers who wanted to see the company succeed and would continue to reinvest over the years.
  • A value-add network: Raising from retail allowed Monogram to amass a waiting list of thousands of patients eager to participate in future trials.
  • Aligned incentives: Their mission to improve patient outcomes and build a better future for those struggling with joint pain resonated with retail investors.

The Power of Retail: Monogram's Capital Journey

Start Date End Date Type Platform Amount Raised # Investors
3/13/193/31/20A+SeedInvest$14,588,6686,000
11/16/201/16/21A+StartEngine$2,965,5018,000
1/17/212/18/22A+StartEngine$23,647,85314,082
7/15/223/16/23CFDealMaker$4,673,0002,249
3/1/234/8/23A+Republic$232,275120
3/1/235/23/23A+DealMaker$15,958,3645,198
5/18/23-Nasdaq listing
7/2410/24Unit OfferingDealMaker$12,990,1032,745

Monogram Capital Raise Timeline

Monogram's first direct-to-investor raise was a $14.6M round in 2019. Since then, Monogram has raised retail capital six additional times, using Reg A+ as a springboard to a Nasdaq listing in 2023.

Each raise brought in new believers—and more importantly, kept bringing them back. That's the long-term power of retail capital. It's not just one campaign—it's a compounding asset that grows with the business.

$80M+
Raised across seven campaigns
~40,000
Investors championing Monogram's vision
20%
Of each raise came from previous investors

Marketing Excellence

DealMaker Reach provided strategic investor acquisition services, helping Monogram connect with the right audience through high-impact channels.

Premium Publications

Targeted campaigns in premium publications like Morning Brew captured qualified investors

High-Engagement Webinars

Engaging events that generated over $4.3 million in investments

Community Building

Strategic approaches that fostered a loyal shareholder base

Investment Momentum

Innovative approaches that amplified investment momentum

Monogram's Journey to Success

Monogram's journey has been defined by relentless innovation, strategic fundraising, and breakthrough advancements in robotic-assisted joint replacement. From early-stage research to a Nasdaq listing and beyond, Monogram's milestones reflect its evolution into a pioneering force in orthopedic surgery:

  • Filed its first patent application in 2017
  • Conducted clinical studies at UCLA and University of Nebraska
  • Expanded the team with key hires
  • Attracted a top-tier advisory board to guide clinical innovations
  • Signed their first distribution partnerships
  • Made headlines with cutting-edge live demonstrations
  • Secured 501(k) FDA clearance for the mBôs surgical system

Nasdaq Debut & Beyond

In May 2023, Monogram Orthopaedics successfully listed on the Nasdaq—a significant milestone offering liquidity and growth opportunities for the company.

For most companies, that would be the end of their story in the private markets. But for Monogram, it was just the beginning of a new chapter.

Public perception says you can't raise privately post-IPO. Monogram proved that wrong.

Defying conventional fundraising norms, Monogram raised an additional $13 million from private investors, powered by DealMaker. This move highlighted the power of a dedicated investor community and provided additional strategic growth capital. Meanwhile, strategic digital marketing for the private offering helped boost the public share price—a win-win for the company and its investors, both public and private.

This was retail capital at its best: strategic, repeatable, and aligned.

One vision. Zero compromises.

This wasn't a one-time raise. It was a multi-year capital strategy.

Retail capital helped Monogram:

  • Go from concept to commercialization without relying on VCs
  • Retain ownership and control in a high-burn industry
  • Build a base of loyal shareholders who invested not once, but over and over again
  • Uplist to the Nasdaq, and still keep raising post-IPO

This is what makes retail capital different. It doesn't expire—it compounds. And DealMaker is built to maximize that long-term value.

Dr. Doug Unis Quote
Ben Sexson Quote

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