Regulation Crowdfunding, or Reg CF, has experienced 35 failures so far in 2025 and 19 exits year to date. This is according to a recent report generated by KingsCrowd.
Reg CF is the smallest securities exemption that enables online capital formation. While it first allowed issuers to raise just $1 million, a meager amount, today Reg CF issuers may raise up to $5 million. Securities offerings must be handled a regulated Funding Portal or Broker Dealer.
The KingsCrowd data provides important insight into the viability of this exemption which allows non-accredited investors to purchase securities.
According to KingsCrowd, the 35 failures so far this year puts this metric at its lowest level since 2020.
In regard to exit opportunities, either via a public offering or an merger/acquisition event, 2025 is on track to match 2024.
KingsCrowd states:
“2022 and 2023 marked a rough patch, with spikes in bankruptcies (especially in 2023), shut-downs, and asset sales — many of which left investors with little to no return. Encouragingly, these categories declined in both 2024 and 2025 YTD, suggesting the worst of the post-rate-hike fallout may be behind us.”
Early stage investing holds risk and many, if not most, early stage ventures fail. Similar to a venture capitalist, investors in these private securities should expect to generate decent returns on a portfolio basis over time.
Kingscrowd also shares that Reg CF issuers raised approximately $35 million, after a “sluggish summer” across all platforms in September 2025.
The Reg CF sector has long been dominated by several platforms, including Wefunder, StartEngine, DealMaker and Honeycomb Credit. If this exemption receives an update by Congress, perhaps raising the funding limit, it may drive more interest from issuers as well as investors.
