This document summarizes key aspects of crowdfunding under Regulation CF, including the first 50 offerings filed since the regulation took effect in May 2016. It notes that issuers can raise up to $1 million, investors are not required to be accredited, and investments are limited based on income and net worth. These first 50 offerings seek to raise between $6-30 million in aggregate and cover industries like social enterprises, breweries, and biotech. It also provides an example offering for Rodeo Donuts, an LLC formed in May 2016 seeking to raise $50,000 through crowdfunding.

1. © Copyright 2016 by K&L Gates LLP. All rights reserved.
Crowdfunding: The First 50 Offerings
Crowd On!
Alliance of Angels – July 27, 2016

2. REGULATION CF
 May raise up to $1M in a 12-month period
 Maximum per investor is $100k
 Issuer must be US private entity and not an
investment company
 Investors do not need to be accredited
 Must conduct the transaction through a SEC-
registered intermediary (broker or registered
funding portal) through online platform
 Advertising OK, subject to limitations & conditions
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3. INVESTMENT LIMITS
 If annual income or net worth is $100k or over,
then lesser of 10% of annual income or net
worth, but maximum of $100,000
 If annual income or net worth is less than
$100k, then the greater of $2,000 or 5% of
annual income or net worth
 Spouse’s income can count but then aggregate
investment is subject to maximum
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4. HOW MANY, HOW MUCH?
 50 companies have filed with the SEC since May
16 (when Regulation CF took effect)
 Minimum target offering amounts range from
$20k - $500k, with median of $55k
 All but one issuer will accept offers in excess of
the minimum target (up to a max. of $1M)
 If fully successful, these 50 companies will raise
an aggregate of between $6M to $30M
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5. OFFERING PERIODS, ISSUER AGE
 Offering periods range from 21 days to one year,
with median at approximately 6 months
 Most issuers are start-ups, with median age of
approximately one year since formation (but 9
issuers were more than five years old)
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6. SECURITIES OFFERED
 Common Stock (16)
 “SAFEs” (14)
 Debt (7)
 Preferred Stock (6)
 LLC Interests (5)
 Convertible Notes (2)
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7. INDUSTRY COVERAGE
 “Social enterprises” – 7 issuers are “benefit
corporations” and another 9 issuers have strong
social and/or environmental missions
 Craft breweries, distilleries, and licensed
establishments (8)
 Beta Bionics Inc. on pace to be the first offering
under Reg. CF to raise the max. of $1M – at a
$100M valuation!
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8. WASHINGTON CASE STUDY: RODEO DONUTS
 Formed: May 2016
 LLC Units
 Target Offering Amount: $50,000
 Offering Deadline: November 2016
Rings
Honey Blood Orange
Crispy Chocolate
Kentucky Mule
Blueberry Lemon Thyme
Filled
Rodeo Caviar ‘n’ Cream
Calamity Jane
Peanut Butter ‘n’ Berry
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9. THANK YOU
CJ Voss
cj.voss@klgates.com
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10. THANK YOU
CJ Voss
cj.voss@klgates.com
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