Regulation Crowdfunding for ICO’s

  • Companies not formed in America
  • Companies already subject to the Securities & Exchange Act of 1934
  • Certain investment companies
  • Companies lacking a specific business plan (TAKE NOTE, ICO PEOPLE!)
  • Companies formed solely to engage in a merger or acquisition with an unidentified company
  • Information about officers and directors and < 20% owners;
  • A description of the issuer’s business and how they plan to use the money raised;
  • The token price at the time of the public issuance, and how the price was determined;
  • The target offering amount, the deadline to reach it, and whether the issuer will accept investments in excess of the target offering amount; (note can’t go above $1 M)
  • Certain related party transactions that, in the aggregate, exceed five percent of the aggregate amount of capital raised by the issuer in reliance on Rule 4(a)(6) during the preceding 12-month period;
  • A disclosure of the issuer’s financial condition and financial statements;
  • A description of any material terms of any indebtedness of the issuer
  • Any material terms of any indebtedness of the issuer.
  • Any other material information that is not misleading
  • Compensation paid to the intermediary (ex: the crowdfunding portal)
  • The issuer’s name, SEC file number, and CRD number of the intermediary
  • Financial statements have to be prepared according to GAAP, but if the financial statements were audited, the audited statements are the ones that need to be disclosed.
  • If the issuer has not yet filed a tax return, and is not required to file a tax return before the end of the offering, then the tax return info doesn’t need to be provided.
  • If raising less than 100K, you only need to disclose the amount of your total income; taxable income and total tax as reflected on the federal tax return and signed by a principal exec officer.
  • If raising between $100K and $500K, or it’s your first time crowdfunding, you are required to provide financial statements that are reviewed by any independent public accounting firm (unless audited financials are available in which case they must be provided.)
  • All other issuers are required to provide financial statements audited by a public accountant that is independent of the issuer.
  • All issuers will be required to provide a complete set of their financial statements, described as balance sheets, income statements, statements of cash flows and statements of changes in owners’ equity as well as notes to the financial statements.
  • Ex: You earn $80,000 and have net worth of $20,000, you can invest $4,000
  • Ex: You earn $20,000 and have net worth of $80,000, you can invest $2,000
  • Ex: You earn $120,000 and have net worth of $120,000, you can invest $12,000.
  • Ex: You earn $150,000 and have net worth of $100,000, you can invest $10,000.
  • Ex: You earn 170,000 and have net worth of $500,000, you can invest $17,000.
  • Under Rule 501, an investor can transfer them back to the issuer before the year is up;
  • To any Accredited Investor;
  • As part of an offering registered with the SEC;
  • To a family member of the purchaser;
  • To certain trusts; and
  • In connection with death or divorce or other similar circumstances.
  • Registered broker-dealer; or
  • A registered funding portal (Ex: Start Engine or VC500)
  • And you have to pick one or the other; you can’t use both at the same time.



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Sasha Hodder

Sasha Hodder


Crypto Attorney; Former Trader; Host of the Hodlcast Podcast; Freedom Enthusiast;; @sashahodler