A side-by-side raise runs a Reg CF offering for the public alongside a Reg D offering for accredited investors, usually on the same terms. SEC integration rules (Rule 152) treat them as separate if each meets its own conditions, for example that 506(b) investors were not found through the Reg CF advertising.
- Concurrent Reg CF and Reg D offerings are permitted under Rule 152 if each complies with its own exemption.
- Investors found through public solicitation should not be placed in a 506(b) offering.
- Terms are usually identical so the crowd gets the same deal as the lead.
- The Reg CF part is capped at $5M per 12 months; the Reg D part is not.
- Pooling crowd investors in a crowdfunding vehicle keeps the cap table clean.
Why run two offerings?
A lead investor brings a large cheque and credibility. A community round brings customers, advocates and many small cheques. Reg CF alone is capped at $5M; Reg D alone excludes most of your users. Together they combine both.
What keeps the offerings separate?
The SEC's integration framework (Rule 152) asks whether each offering satisfies its own exemption. The practical rules:
- If the Reg D part is 506(b), its investors should come from relationships, not from the public Reg CF campaign.
- If the Reg D part is 506(c), public solicitation is fine but buyers must be verified accredited. See accredited investor verification.
- Disclosures should be consistent; giving the lead materially better information or terms creates fairness and antifraud questions.
How are terms aligned?
| Element | Common practice |
|---|---|
| Instrument and price | Same for both offerings |
| Side letters | Lead may get information or pro rata rights; disclose material differences |
| Closing | Coordinated; Reg CF has its own minimum offering period |
| Cap table | Crowd often pooled in a vehicle |
What does it do to the cap table?
Without pooling, hundreds of crowd investors appear individually. Read the crowd cap table and the SPV explained. For the rules on each side, see Reg CF vs Reg D vs Reg A+ and what you may post about your raise.
What does a typical sequence look like?
- Agree terms with a lead investor (often under Reg D).
- Decide whether the community part runs under Reg CF and on which platform.
- Test the waters for the Reg CF part where allowed. See testing the waters.
- File the Form C and launch the Reg CF campaign with the same price and instrument.
- Close the Reg D part and the Reg CF part in coordination, respecting the Reg CF minimum offering period.
Why do leads sometimes resist?
- Concern about many small investors on the cap table.
- Worry that terms will be public in the Form C.
- Extra time and coordination before closing.
Pooling crowd investors into a single vehicle answers the first concern. See the SPV explained. Transparency about terms is a feature for many founders: their community sees they get the same deal as professionals.
What are the main risks?
- Mixing up communications: a public Reg CF post that reaches someone you then place in a 506(b) round.
- Inconsistent information between the lead and the crowd.
- Underestimating the marketing work for the crowd part. See what a Reg CF raise really costs.
Frequently asked questions
Can I raise Reg CF and Reg D at the same time?
Yes. Concurrent offerings are permitted if each meets its own exemption conditions under the SEC's integration rules.
Do crowd investors get the same terms as the lead?
Usually yes on price and instrument. Leads may receive additional rights through side letters, which should be disclosed where material.
Can investors from my Reg CF campaign join the 506(b) part?
Generally they should not if they were reached through public solicitation. Use 506(c) with verification if you want public outreach for the accredited part.
Does a side-by-side round complicate future rounds?
It can, mainly through the number of investors. Pooling the crowd in a vehicle reduces that.
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Join the waitlist →Sources and further reading. 17 CFR §230.152 (integration); SEC, Exempt offerings.
Educational material, not legal, tax or investment advice. Rules and figures change; confirm with qualified counsel or a tax adviser in your jurisdiction before acting. Last updated October 6, 2026.