To raise $2.4 million (or $2,400,000) through crowdfunding, you still fall under Regulation Crowdfunding (Reg CF), which currently allows a maximum raise of $5 million per 12-month period.
However, crossing the $1.235 million threshold triggers the SEC’s highest level of financial scrutiny.
1. The “Audit” Requirement
The biggest change from your previous $1.25M plan is the audit:
- Mandatory Audit: For any raise over $1,235,000, you must provide financial statements that have been audited by an independent CPA.
- Difference from a “Review”: A review (required for raises under $1.235M) provides “limited assurance,” whereas an audit provides “reasonable assurance” through more rigorous testing of your books.
- Two-Year Rule: You must provide audited GAAP-compliant financial statements for the past two fiscal years (or since the trust’s inception if it is newer).
2. Core Operating Rules
The standard Reg CF rules still apply regardless of the amount:
- Form C Filing: You must file an official offering statement (Form C) with the SEC before you can officially “ask” for money.
- Registered Intermediary: The entire $2.4M raise must be conducted through a single SEC-registered funding portal or broker-dealer.
- Advertising (Tombstone Rules): You cannot “hard sell” the investment on social media. You are generally limited to directing people to the funding portal to see the details.
3. Investor Limits for a $2.4M Raise
While you are raising more, the limits on individual non-accredited investors stay the same to protect them:
- Accredited Investors: Can invest unlimited amounts toward your $2.4M goal.
- Non-Accredited: Are limited based on their income/net worth (typically 5% or 10% of their annual income, not to exceed $124,000 total per year).
4. Cost and Timeline Impact
- Cost: Expect to pay between $10,000 and $30,000+ for a full CPA audit, compared to roughly $2,000–$5,000 for a simple review.
- Timeline: An audit can take 4–8 weeks to complete, which may delay your launch compared to the $1.25M “reviewed” route.
Strategic Comparison
| Feature | $1.25 Million Raise | $2.4 Million Raise |
|---|---|---|
| SEC Regulation | Reg CF | Reg CF |
| Financial Req. | CPA Review | Full CPA Audit |
| CPA Cost | Low ($2k–$5k) | High ($10k–$30k+) |
| Investor Pool | Public (Anyone) | Public (Anyone) |