Crowdfunding is a way to get small amounts of money from a large number of people to fund a particular project. It’s been around for a few years in the form of small donations for arts and social projects, in return for token rewards such as t-shirts or dinner with the founders, "Donation and Reward Crowdfunding"

On October 23, 2012 the SEC amended Rule 506 under Regulation D to permit general solicitation in 506 offerings in which sales are made only to accredited investors. It also provides for an exception from broker-dealer registration requirements for platforms or mechanisms that aim to facilitate offerings under Rule 506 of Regulation D.

Crowdfunding has been used to describe a number of methods that enterprises and collections of people may use to fund or support various initiatives. For startup companies looking to raise debt or equity from the sale of securities, crowdfunding refers to raising such funds, primarily over the Internet, in smaller amounts from a larger pool of investors though intermediaries.

The new rules, now referred to as Reg A+ (Tiers 1 and 2), were announced on March 25, 2015 and take effect June 19th, 2015. The mandate for this change is found in Title IV of the JOBS Act. The old $5-million cap on Reg A offerings has been raised to $20-million for Tier 1 offerings and $50-million for Tier 2 offerings (with no more than 30% coming from existing holders selling their securities).