Is it legally allowed to "go-solo" on crowdfunding a startup by bypassing crowdfunding platforms?

Patrick Muasya

December 28th, 2016

Alejandro Cremades Author of The Art of Startup Fundraising & Serial Entrepreneur

December 28th, 2016

I would assume you are referring to crowdfunding involving investments... Given that with rewards (aka donation) crowdfunding there are no contractual obligations.

With that been said, as long as you have not signed any brokering agreement with one of those platforms you should be able to do an equity or debt offering all on your own.

However, you will need to comply with all the regulations and file the form D indicating that you did general solicitation and took the right measures to verify that each one of your investors are accredited (over $200K in income or $1M in assets). Normally you can do this by having a certified letter from the lawyer of accountant of the investor stating that their client meets the accredited criteria.

If you are looking to take investment from non-accredited investors then it gets a little bit more complex. If this is the case, I would highly recommend that you seek advise from a good attorney with expertise within the area of securities law.

Note that crowdfunding was not invented by online platforms. It has been out there for hundreds of years and a good example of this are war bonds which date back to the 1730s.

As stated on the paragraph above, folks have been raising capital on their own offline way before those platforms came into place. In fact there are over $100B being invested by family and friends every year.