SEC's 2026 Small Business Forum: Reg CF Could Go to $20M — And Accredited Investor Rules May Change Too

TL;DR: The SEC's 45th Annual Small Business Forum, held March 9, 2026, produced a report delivered to Congress on July 27, 2026. Participants voted to prioritize five recommendations — led by raising the Regulation Crowdfunding annual cap from $5 million to $20 million and expanding the accredited investor definition beyond wealth thresholds. These are recommendations, not rules. But the SEC does not ask for input it intends to ignore. Read the full SEC forum report.

SEC's 2026 Small Business Forum: Reg CF Could Go to $20M — And Accredited Investor Rules May Change Too

By Jeff Barnes, MBA | Regulatory Compliance | July 29, 2026

Every year, the SEC convenes its Small Business Forum , a gathering of founders, investors, lawyers, and capital markets participants who submit recommendations on how federal securities law could better serve early-stage companies. The 45th Annual Forum was held on March 9, 2026. The resulting report was formally transmitted to Congress on July 27, 2026, per the SEC's official press release.

Five recommendations rose to the top when participants voted. Two of them directly affect how private capital flows to early-stage companies and who is legally permitted to participate. If either advances into rulemaking or legislation, the structural landscape for startup fundraising changes , not at the margins, but at the foundation.

Here is what was recommended, why it matters, and what the realistic path forward looks like.

What the Forum Recommended

Forum participants voted to prioritize the following five recommendations, ranked by support:

1. Raise the Regulation Crowdfunding (Reg CF) annual cap from $5 million to $20 million.
2. Expand the accredited investor definition to include measures of financial sophistication beyond wealth and income.
3. Create a federal friends-and-family exemption that preempts state blue sky laws.
4. Modernize regulation of crypto assets that are securities under existing federal frameworks.
5. Expand funding resources for small businesses, including improved access to SBA programs and federal grant pipelines.

Items one and two are the most consequential for accredited investors and founders operating in the private markets. Item three addresses a practical friction point that has stifled early-stage fundraising for decades. This article focuses on all three.

Coverage from PYMNTS confirmed the breadth of support across forum participants for both the Reg CF increase and the accredited investor expansion, noting that these two recommendations generated the highest vote totals at the forum.

Why the $20 Million Reg CF Cap Matters for Founders

Regulation Crowdfunding was created by the JOBS Act of 2012 and launched in 2016. It allows companies to raise capital from both accredited and non-accredited investors through SEC-registered crowdfunding portals. The original cap was $1.07 million per year. In 2021, the SEC raised that to $5 million , a meaningful improvement, but one that still leaves many growth-stage companies unable to use the exemption for a meaningful round.

The numbers tell the story. In 2025, approximately 1,100 Reg CF offerings raised a combined $924 million. That is an average raise of roughly $840,000 per offering. The $5 million cap is not the average deal , it is a ceiling that stops founders from scaling a crowdfunding round into Series A territory without switching exemptions, registering securities, or pursuing a Regulation A+ offering with its own compliance overhead.

A $20 million cap changes the arithmetic substantially. It puts Reg CF in range for seed-plus and early Series A rounds. A founder building a consumer brand, a fintech product, or a regional real estate platform could run a single Reg CF campaign and raise an amount that was previously only accessible through institutional venture or a Regulation A+ offering , both of which carry higher costs and longer timelines.

For accredited investors, this creates a different kind of opportunity. Reg CF offerings historically attracted non-accredited retail investors as the primary pool. A higher cap makes it rational for accredited investors to participate more actively, because the capital deployed per deal and the potential ownership stake both scale. Right now, a $5 million Reg CF round is often too small to attract serious accredited capital when the investor is comparing it against Reg D deals. At $20 million, that calculus shifts.

There is also a competitive signal here. Equity crowdfunding markets in the UK and parts of the EU have operated at higher thresholds for years. The US cap has been a structural disadvantage for platforms and issuers competing for cross-border investor attention.

The Accredited Investor Expansion Debate

The current accredited investor standard was set in 1982 and has been adjusted only marginally since. To qualify, an individual must have earned more than $200,000 per year ($300,000 joint with a spouse) in each of the past two years and expect to do so again, or hold a net worth exceeding $1 million, excluding the primary residence.

The 2026 forum recommendation calls for adding "additional measures of sophistication" as a qualification pathway. This is not a new idea. The SEC began studying the question formally in 2020 and has since added a narrow set of credentials to the definition , Series 7, Series 65, and Series 82 license holders were added as qualified regardless of net worth. But the 2026 recommendation pushes further, asking the SEC to consider broader professional expertise and fiduciary licenses as valid proxies for the judgment that the accredited investor standard is designed to protect.

The argument in favor is straightforward. A licensed CPA advising a $50 million portfolio, a certified financial planner with two decades of investment experience, or a venture attorney who has reviewed hundreds of term sheets is arguably better equipped to evaluate private market risk than a 28-year-old software engineer who cleared $1 million in net worth during a tech bull run. The wealth threshold was designed as a proxy for sophistication and loss tolerance. If better proxies exist, the argument goes, the SEC should use them.

The argument against is also straightforward. Opening the accredited investor pool through credential-based pathways expands the number of people exposed to illiquid, high-risk, often fraudulent private offerings. Enforcement resources do not scale with the investor pool. The SEC investor protection mission and the capital formation mission exist in tension here , and they always have.

For founders, a broader accredited investor pool means a larger potential investor base for Regulation D offerings, which remain the most commonly used private placement exemption. For accredited investors on platforms like this one, the definitional change matters less in the short term , those who already qualify would not be affected , but the composition of co-investors in syndicated deals could shift.

The Friends-and-Family Exemption Explained

The third recommendation addresses a problem that has existed since securities law was codified: founders raising their first $50,000 to $250,000 from people who know them personally face a patchwork of state and federal compliance requirements that are wildly disproportionate to the risk involved.

Under current law, a pre-seed raise from five family members and three former colleagues technically requires either a Form D filing with the SEC (for a Regulation D exemption) or compliance with the relevant state securities law in every state where an investor resides. Blue sky laws , the state-level securities regulations that predate the federal securities acts , vary by state and can require registration, filing fees, and notice filings that cost more than the raise itself at very early stages.

The forum recommendation calls for a federal exemption specifically designed for raises from close personal contacts , people with a pre-existing, substantive relationship with the founder , that would preempt state blue sky requirements. This mirrors language the SEC has studied in concept for years and that some legal practitioners have argued could be implemented without Congressional action, depending on how it is structured.

For accredited investors, this recommendation is largely background. But it matters for portfolio companies at the earliest stage: if founders can move faster and cheaper through the friends-and-family round, they arrive at the structured seed round with better traction, cleaner cap tables, and less legal debt. That benefits every investor who comes in later.

What Happens Next: The Legislative Path

The forum report has been delivered to Congress. That is where the easy part ends.

Raising the Reg CF cap requires either an SEC rulemaking or Congressional action. The SEC's rulemaking authority over Reg CF is constrained by the statutory language of the JOBS Act, which set the original thresholds. The 2021 increase to $5 million was accomplished through SEC rulemaking under existing authority. A jump to $20 million may require Congress to amend the statute, depending on how the SEC's Office of General Counsel interprets current authority.

The accredited investor definition, by contrast, is an SEC rulemaking matter. The Commission can amend the definition of "accredited investor" in Rule 501 of Regulation D without Congressional action. It has done so before. The open question is whether the current Commission has the appetite and the votes to do it, and what the final definition would look like.

The friends-and-family exemption sits in an ambiguous middle ground. Some versions of it could be implemented through SEC rulemaking. others would require legislative amendment to the Securities Act of 1933.

Historical precedent suggests a timeline of 12 to 36 months from forum report to final rule , if the Commission acts at all. Many forum recommendations never reach rulemaking. The factors that increase the odds: a favorable Commission majority, active Congressional sponsors willing to carry legislation, and a business and investor coalition that keeps the issue visible. All three were present during the JOBS Act era. Whether they align again depends on the political environment through 2027.

Risks and Counter-Arguments Worth Taking Seriously

Not every observer of early-stage capital markets thinks these changes are straightforward wins.

On the Reg CF cap increase: critics point out that the existing $5 million cap has not been a binding constraint for most offerings. The median Reg CF raise is well under $1 million. Raising the cap to $20 million does not automatically produce $20 million campaigns , it just permits them. If the market is not producing large Reg CF raises now, that may reflect investor appetite and platform infrastructure, not the cap itself. A higher cap with weak enforcement infrastructure and limited investor protections for non-accredited participants could produce larger failures as well as larger successes.

On the accredited investor expansion: investor advocates at consumer protection organizations have argued consistently that the existing accredited investor threshold already exposes too many people to unsuitable risks. Expanding the pool through credential-based tests introduces a credentialing industry risk , the possibility that low-cost certifications emerge specifically to manufacture accredited investor status, effectively selling access to private markets under a compliance veneer.

On the friends-and-family exemption: state securities regulators, organized through the North American Securities Administrators Association (NASAA), have historically opposed federal preemption of state blue sky laws. They argue that state-level enforcement has caught fraud that federal authorities missed. A broad preemption, even for small raises, erodes that infrastructure.

These are legitimate objections. The fact that a recommendation emerged from a forum does not mean the policy is sound. The SEC will weigh these arguments in any comment period, and the final rules , if they come , will reflect that process.

What Accredited Investors Should Watch

For investors currently active in the private markets, here is the practical monitoring list:

• SEC rulemaking calendar. Watch for an Advance Notice of Proposed Rulemaking (ANPRM) or a Notice of Proposed Rulemaking (NPRM) on either the Reg CF thresholds or the accredited investor definition. These would be published in the Federal Register and trigger a public comment period , typically 30 to 60 days , where investors and funds can submit input.
• Congressional activity. The JOBS Act 3.0 and related legislation have been introduced in prior Congresses and stalled. Watch for any reintroduction that incorporates the $20 million cap language. Senate Banking Committee and House Financial Services Committee activity is the leading indicator.
• Platform behavior. Reg CF portals , Republic, Wefunder, StartEngine, and others , will signal shifts in issuer behavior if the cap changes. Watch for larger raise targets appearing on those platforms before a rule is final. issuers often test the edges of what the market will support.
• Fraud enforcement patterns. Any expansion of investor eligibility or raise limits will be accompanied by increased enforcement scrutiny. The SEC's enforcement record on Reg CF fraud has been active. That will not diminish if the cap rises.

The forum report is a leading indicator, not a policy outcome. For investors who participate actively in early-stage deals, understanding what is being considered , and what the realistic odds of enactment are , is part of managing a private market portfolio responsibly.

Disclosure: This article is for informational purposes only and does not constitute legal, tax, or investment advice. Regulation Crowdfunding, Regulation D, and related securities exemptions involve complex legal requirements. Consult a qualified securities attorney before structuring or participating in any private offering. Angel Investors Network does not provide broker-dealer or investment advisory services. All investment in private securities involves significant risk, including total loss of principal.

Primary Sources

• SEC Office of the Advocate for Small Business Capital Formation
• SEC EDGAR — Recent Reg CF Related Filings
• Reg CF vs Reg A+ 2025 Scorecard: $924M in Crowdfunding Data
• SEC 506(c) On-Chain Digital Attestation: What It Means for Tokenized Securities

Author Disclosure: Jeff Barnes, MBA has no personal position in any company, fund, or platform named in this article. Angel Investors Network has no current commercial relationship with any party mentioned. AIN provides marketing and education services, not investment advice. Past performance does not guarantee future results. All investments involve risk, including loss of principal.