This week, DealMaker co-founder and CEO Rebecca Kacaba testified before the U.S. House Financial Services Committee, advocating for critical reforms to Regulation Crowdfunding (Reg CF) and Regulation A+ that will drive capital formation, support American job creation, and expand access to investment opportunities for everyday Americans. Representing one of the most innovative fintech firms in the online capital-raising space, Kacaba presented a compelling, data-driven case for raising the regulatory caps that currently constrain entrepreneurs and retail investors alike.

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The Power of Regulation CF and Regulation A+: Fueling the American Dream

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Since the enactment of the JOBS Act, Reg CF and Reg A+ have enabled businesses to collectively raise nearly $9 billion—a vital source of funding at a time when traditional capital sources remain concentrated and restrictive. However, these mechanisms are still hampered by outdated regulatory limits that hold back growth and job creation.

• Reg CF: Since 2016, Reg CF has raised over $2.4 billion, yet growth has slowed due to the $5M cap per offering. By increasing this cap to $10M or higher, the market could see fundraising potential double or even triple.
• Reg A+: While Reg A+ has raised over $6.5 billion, new offerings have declined by 24% from 2021 to 2024. Many promising companies are held back by the $75M cap, particularly in capital-intensive industries like biotech and infrastructure.
• The Market Disparity: In stark contrast, Regulation D—available only to accredited investors—has raised over $10.8 trillion since 2016, illustrating the capital imbalance between retail and institutional access.

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“This isn’t just about capital markets—it’s about economic growth and creating jobs,” Kacaba emphasized. “When businesses have access to the funds they need, they can scale, innovate, and put more Americans to work.”

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Job Creation: The Real Impact of More Efficient Capital Markets

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Companies powered by community capital are driving significant job creation and economic activity:

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• Job Growth: Reg CF-funded companies supported 110,976 jobs in 2024, a dramatic increase from just 6,432 jobs in 2016.

• Economic Return: Every $1 invested via Reg CF generates a 10x return in economic activity—$26 billion reinvested into local economies.

• DealMaker’s Impact: With over $2 billion raised for 900 American companies, DealMaker-powered raises contribute an estimated 7,000 new jobs per year.

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If Congress enacts the proposed reforms, projections indicate a $2.3 billion capital flow over the next four years, translating to 46,000 new jobs.

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Kacaba stated, “We cannot afford to leave billions of dollars in potential economic impact on the table. Expanding these capital-raising frameworks will create jobs, fuel innovation, and level the playing field for founders outside of traditional venture capital hubs.”

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Leveling the Playing Field: Crowdfunding as a Real Alternative to Venture Capital

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While venture capital has predominantly focused on tech and biotech startups with access to exclusive networks, Reg CF and Reg A+ offer a more inclusive alternative:

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• Diverse Industries: Unlike VC, which often favors a select group of industries, Reg CF and Reg A+ support a wide range of sectors, including consumer products, manufacturing, and clean energy.

• Flexibility for Founders: Founders using community capital can raise funds on their own timeline—unlike VC-backed startups, which face pressure to meet investor-driven growth benchmarks.

• Resilient Market Performance: While venture capital plummeted by 49% in 2023, Reg CF proved resilient, with only a 15% decline, demonstrating the stability of crowdfunding during economic downturns.

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Policy Recommendations: Building a More Inclusive Capital Market

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Kacaba’s testimony laid out a clear set of policy recommendations to modernize Reg CF and Reg A+:

• Raise the Reg CF Cap to $10M+: Doubling the limit would unlock significant growth potential and allow more businesses to scale without artificial constraints.
• Increase the Reg A+ Cap to $150M: Enabling mid-market companies to thrive, particularly in industries with high capital demands, such as biotech and infrastructure.
• Introduce Tax Incentives: Providing tax advantages for retail investors, similar to those offered for retirement accounts, could stimulate market participation and boost economic activity.
• Streamline Compliance: Simplifying the regulatory requirements for Reg A+ offerings will reduce friction for businesses and improve market efficiency.
• Harmonize Reg CF and Reg A: Aligning the rules for these exemptions will simplify compliance, enhance investor protection, and support businesses at all stages of growth.

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The Future of Capital Markets is Inclusive

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Kacaba’s message was clear: If Congress modernizes Reg CF and Reg A+, it will unlock billions in capital, create thousands of jobs, and provide a much-needed alternative to the declining venture capital ecosystem.

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“Retail investors deserve access to the same wealth-building opportunities as institutional players,” she concluded. “By making these changes, we can unleash an entirely new era of economic growth—one where innovation isn’t bottlenecked by outdated regulations, but accelerated by them.”