What It Takes to Raise Capital Through Reg A

I was recently invited to join a panel hosted by Kingscrowd alongside leaders in the crowdfunding space.

The conversation covered what it actually takes to run a Reg A or Reg CF offering today: the marketing, compliance, platform decisions, investor relations, and founder commitment required to make a raise work.

Here are the things I think every founder should understand before they start.

You have to treat it like a full-time job

This came up early and kept coming up throughout the conversation.

If you are planning to launch a raise and manage it in the background while running your company, the odds are not in your favor. Most raises require sustained, daily effort from the founding team from day one through close.

The rare exception is the company that goes viral organically. Do not build your plan around being that company.

That means pursuing your network, activating your customers, and running paid outreach at the same time. Your network alone rarely sustains a raise beyond the first few hundred thousand dollars. If you are targeting the millions, you need a marketing plan and a budget behind it.

Budget accordingly or reconsider your timing

The general benchmark: expect to spend 10 to 15% of your raise target on marketing.

If you want to raise $2 million, plan for $200,000 to $300,000 in total marketing spend.

That spend also does not happen evenly. You will often spend more toward the end of your raise, when momentum and time pressure tend to drive a disproportionate share of investment. Pacaso saw this play out across a 12-month Reg A. So did Aptera.

One thing worth noting: the 10 to 15% range is a benchmark, not a ceiling or a floor.

At Aptera, we spent closer to 5% because we had a strong ambassador community doing real grassroots work. If you have built that kind of following before you raise, your dollars stretch further.

The difference between Reg CF and Reg A is significant

Jamie Ostrow from CrowdCheck walked through this clearly.

Reg CF lets you raise up to $5 million annually. It is faster to launch, typically six to eight weeks, lower cost to set up, and the ongoing reporting requirements are relatively light.

Reg A lets you raise up to $75 million annually, but the SEC qualification process takes three to six months, and the ongoing compliance costs are real.

Chris Lustrino shared that his annual reporting requirements as a Reg A company run close to $100,000 a year between audits, financials, and filings. That is before any marketing spend.

Jamie’s framing was direct, and I think it is right: make sure you can fill a Reg CF before you commit to a Reg A.

Platform selection shapes everything downstream

This is a decision most founders underestimate.

Marketplace platforms like Wefunder and StartEngine give you access to an existing investor audience, which helps if you are starting from scratch.

The tradeoff is less visibility into your funnel. You get fewer analytics, less data on who is following and why, and limited ability to follow up.

A self-hosted platform through something like DealMaker gives you CRM data, investment intent signals, and the ability to run outbound investor relations at scale.

Pacaso used that data to call leads, track funnel stage, and follow up with people who were close to committing. That investor relations effort directly contributed to their raise.

The right choice depends on whether you are coming in with an existing community or building one from scratch.

Investor relations is where most raises are won or lost

This was probably the most consistent theme across the whole conversation.

The investors who move markets in a raise are often the ones you have already been talking to. They have read the updates, seen the milestones, and had a conversation with someone on your team.

They come back for second and third investments. They bring their friends.

The case for ongoing investor relations after a raise closes is simple: a regular email, a quarterly update, the occasional webinar.

The point is not goodwill alone. It is building the kind of relationship that makes your next raise faster and cheaper than your first.

Compliance is not optional, and it matters more than people think

Jamie was clear: both Reg CF and Reg A are conditional exemptions.

Miss a reporting requirement while your raise is open and you go dark. No exceptions.

Do not make claims about returns or financial outcomes. Do not create artificial price pressure in a Reg A offering the way you might in Reg CF. Work with a securities attorney before you put anything in front of investors.

Beyond compliance, grounded messaging performs better.

The retail investor base has matured. Sophisticated repeat investors, especially the ones writing the biggest checks, are not responding to hype. They are reading your financials and looking for evidence that you know what you are doing.

The community is the long game

A successful raise does not end when the campaign closes.

The investors you bring in are potential customers, partners, and ambassadors. Pacaso saw investors convert into property co-owners. Other companies have found key advisors and strategic partners through their investor base entirely by accident.

At Aptera, investors started volunteering to help spread the word.

One wanted to start a Discord. Others showed up to EV events. We gave them business cards and sent them out into the world.

Leadership thought it was crazy.

It was not.

That is what a real investor community looks like when you give people a way to participate.

The raises that compound over time are the ones where founders treat investors like people they actually want to keep in their corner, long after the offering closes.

Watch the full conversation here.