Analyzing the SEC’s 2024 Exempt Offering Statistics

In an effort to increase transparency in the marketplace, the DERA (the Securities and Exchange Commission’s Division of Economic and Risk Analysis) recently published a report containing new data on the key market areas of public issuers — including exempt offerings. The DERA conducts detailed economic and statistical analyses on issues, trends and innovations in the marketplace to advise the SEC concerning these matters.

This latest report, called the “Market Statistics of Exempt Offerings under Regulations A, D, and Crowdfunding Form 1-A, D, C and C-U Data,” (which we will refer to as the “SEC 2024 Market Statistics Report” or the “2024 Market Statistics Report”), gives market statistics for exempt offerings under Regulation A, Regulation D, and Regulation Crowdfunding (“Regulation CF”). 

The SEC 2024 Market Statistics Report gives updated statistics on these exemptions for calendar year 2024. The report includes the number of offerings raised by each exemption by year and the total amount of capital raised by each exemption.

It is critical that issuers and investors understand the dynamics of today’s capital markets. The SEC’s 2024 Market Statistics Report highlights the importance of these exemptions for businesses for raising capital.

Brief Review of the Exemptions Analyzed
As noted, the exemptions analyzed by the SEC 2024 Report are: Regulation A, Regulation D, and Regulation CF (Regulation Crowdfunding). Below is a brief recap of each of these regulations.

Regulation A 

Regulation A provides an exemption from registration with the SEC for public offerings or certain securities that meet the law’s requirements. The law has a two-tiered structure that allows eligible companies to raise money through offerings without having to register the offering with the SEC.

Tier 1 allows companies to raise up to $20 million in a 12-month period. Under Tier 2, companies may raise up to $75 million in 12 months.

Regulation D

Regulation D (or “Reg. D”) consists of several rules — Rule 504, Rule 506(b), and Rule 506(c). These rules, each of which has its own specific requirements, allow companies to be exempt from the registration requirements. The securities purchased pursuant to a Reg. D exemption are “restricted securities.” They must be resold on the public market using a Securities Act registration statement or valid exemption from resale registration.

Rule 506(b) allows issuers to sell to non-accredited investors (up to 35) but prohibits any form of advertising. In contrast, Rule 506(c) allows issuers to advertise their offerings, but all investors must be accredited investors and the issuer must take “reasonable steps” to verify the accredited investor status of each investor. Finding a reliable and secure investor accreditation program that can provide accredited investor certificates is invaluable for issuers raising capital under a Reg. D exemption.

Regulation CF (“Regulation Crowdfunding”)

The exemption provided in Regulation CF allows companies to offer and sell up to $5 million of their securities-based crowdfunding offerings without having to register with the SEC. Regulation CF offerings are limited as to how many non-accredited investors may invest within a 12-month period. In addition, companies must meet the SEC’s eligibility requirements and can be disqualified by the rule’s “bad actor” provisions.

The DERA’s Analysis of the Exempt Offering Statistics

In its 2024 Market Statistics Report, the DERA reviews two categories of statistics — the number of exempt offerings by type (i.e., Reg. A, Reg. D or Reg. CF) that have occurred between calendar year 2009 through calendar year 2024, and the total amount of capital raised by each of these exemptions. Below, we will summarize the results of each category.

The Number of Exempt Offerings by Offering Type

Number of Regulation D Exempt Offerings 

According to the SEC 2024 Market Statistics Report, despite the drop in filings in 2024, Reg. D is still the most used exemption. While Reg. D filings are greater than those of the other two exemptions, the DERA notes that it is possible that the numbers were even higher, because there is no Form D closing filing required for this exemption.

Reg. D filings peaked in 2021 with 65,372 filings recorded. They dropped to 56,721 in  2024. The drop in Reg. D filings appear to be due to economic issues that reflect an overall decline in investment activity.

Number of Regulation A Exempt Offerings

In the time period analyzed, Reg. A offerings peaked in 2023 with 307 offerings, then dropped to 212 in 2022. In 2024, the number of Reg. A offerings came in at 102. 

Number of Regulation CF Exempt Offerings

Reg. CF offerings have been steadily increasing. In 2017 there were only 146 Reg. CF offerings. In 2022, that number was 899. The numbers dropped to 737 in 2023 but were at 552 for 2024. 

Total Amount of Capital Raised by Each Exemption.

Regulation D Capital Raise

As the most popular exemption, Reg. D dominated the capital raising statistics. In 2024, companies raised a total of $2.148 trillion in Reg. D offerings.

Regulation A Capital Raise

In 2024, $896 million was raised under Reg. A.
Regulation CF Capital Raise

The total capital raise for Reg. CF in 2024 was $179 million. 

Summary

The SEC’s 2024 Market Statistics Report shows an overall downward trend for exempt offerings. Experts believe that this is due to heightened concerns over inflation and challenging market conditions. 

While Reg. D continues to be solid, both Reg. A and Reg. CFs are still evolving. New legislation may help increase the use of these exemptions. Finally, it is expected that upcoming changes to the definition of “accredited investor” may help to open up the investor pool — increasing the use of exemptions. 

Despite the overall downturn in the market, it is clear that these exemptions continue to play an important role in raising capital to create wealth, fund new companies and create more jobs.

For companies fostering innovation, jobs and wealth through the sale of securities, raising capital is essential. Equally important for issuers is understanding the different regulatory exemptions that may apply to their offerings and what those exemptions require. Finding the right investor accreditation program that can provide accredited investor certificates is critical. The securities laws touch on a vast number of financial and investment issues of importance to all investors and issuers. VerifyInvestor.com makes verifying accredited investors easy, cost-effective, secure, and reliable. Our services, (which also include AML/KYC checks, qualified purchaser and qualified client verification), are always code-compliant and confidential. We help companies fully and easily comply with their legal obligations to verify accredited investors.