Is Reg CF Still Worth Building a Crowdfunding Platform Around in 2025?

When Regulation Crowdfunding (Reg CF) was introduced under the JOBS Act in 2016, it promised to open the world of startup investment to everyday investors and offer founders a new way to raise early-stage capital. 

Nearly ten years later, the market looks both mature and fragmented. 

In 2025, platforms like Wefunder, StartEngine and Honeycomb Credit are leading the Regulation Crowdfunding space. However, the question still stands: Is there a real reason or opportunity to launch a new Reg CF platform now?

Recent data from KingsCrowd and Crowdfund Insider provides a clear picture of where the industry stands. By late 2025, 35 companies that raised money through Reg CF had shut down, while 19 achieved successful exits. 

Overall fundraising has also cooled, with about $35 million raised in September.

At first glance, these numbers seem worrying. However, the reality is that the market isn’t collapsing; it is changing. To determine whether Reg CF remains a solid foundation for new platforms, it’s important to distinguish between the performance of startups that raise funds and the success of the crowdfunding platforms themselves, and to examine how competition and regulations have evolved.

Why Reg CF offerings fail

The KingsCrowd report lists 35 failures, which refer to companies that raised money through Reg CF, not the platforms that hosted their campaigns. These failures typically occur when startups go bankrupt, shut down, or sell off their assets, often leaving investors with little return or no return at all.

This isn’t unusual for startups. Most early-stage businesses, no matter how they’re funded, face a high risk of failure. Even in traditional venture capital, many startups don’t make it past five years. The key point is that Reg CF doesn’t change it. It simply opens the door for more people to participate in early-stage investing.

Meanwhile, the crowdfunding platforms themselves, such as Wefunder, StartEngine and Honeycomb Credit, continue to run strong and even grow. None of the major players has shut down. In fact, competition has intensified, as established platforms now hold clear advantages in terms of size, brand reputation, and reach. This makes it more challenging for smaller newcomers to compete.

So, while the 35 failed companies might worry investors hoping for quick returns, they don’t point to any real weakness in the crowdfunding model. The Reg CF system as a whole remains stable, active, and fully operational.

Fewer campaigns, slower funding of Reg CF offerings in 2025

Recent fundraising data helps explain why fewer new platforms are launching. Reports indicate that Reg CF companies raised approximately $35 million in September 2025. This makes September one of the slower months of the year. Several factors are behind this slowdown.

First, the economy is uncertain. Higher interest rates and cautious investor sentiment have reduced the flow of retail investments across all alternative assets, not just crowdfunding. Many investors now prefer safer, more liquid options instead of long-term startup bets.

Second, it has become more expensive for companies to run campaigns. 

To raise funds today, a company needs professional videos, legal help, and paid advertising to attract investors. 

So, funding portals typically charge between 5% and 10% of the total amount raised. Legal services can cost from $1,000 to $10,000, while CPA or auditor reviews usually range between $1,000 and $7,000. 

Companies also pay escrow providers about $500 to $5,000 and stock transfer agents around $50 to $1,000 per month. 

Marketing and promotional campaigns can become the largest expense, often costing $500 to $20,000 per month, depending on how wide the campaign reaches. 

Other necessary costs, such as payment processing, KYC/AML checks, and live offering management, usually add another $300 to $5,000 or more. 

These added costs have made some small businesses think twice before launching a campaign.

Finally, investor fatigue is setting in. The early excitement of “owning a piece of the next unicorn” has faded as people realize that equity crowdfunding carries the same risks and illiquidity as venture investing, but with less control and fewer opportunities to invest in later rounds.

Reg CF platform consolidation

Despite these challenges, the leading portals continue to thrive. Wefunder and StartEngine dominate market volume, while specialized players like Honeycomb Credit and Republic have built loyal niches. Rather than competing solely on transaction volume, these platforms are diversifying their offerings. They expand into Reg A+ campaigns, secondary markets, and institutional partnerships.

This consolidation suggests that Reg CF has matured into an ecosystem where scale and infrastructure are very important. 

Established players benefit from brand trust, operational efficiency, and repeat investors. They can also cross-sell services, such as cap table management, investor relations tools, and deal syndication.

For new entrants, this creates a high barrier to entry. Building a successful crowdfunding portal today requires not only technological capability but also significant marketing reach and regulatory expertise. 

Without a clear differentiator, such as focusing on a specific geographic market, industry vertical, or community mission, it’s nearly impossible to compete head-to-head with established platforms.

Even so, a mature market doesn’t mean innovation has ended. New niche and white-label platforms are emerging. They focus on such areas as renewable energy, local small businesses, and creative industries. For these platforms, it is important not only to raise the most money but to connect with the right audience.

The economics of a Reg CF portal in 2025

Running a Reg CF portal has always depended on volume. Most platforms make money by charging “success fees,” which are typically 5% to 10% of the funds raised. Plus, they can get extra income from services like marketing, escrow management, or investor relations.

But here’s the challenge: in 2025, the total monthly fundraising across all Reg CF portals is only in the range of $30 million. That means a new platform entering the market must face a hard truth: there’s only so much money to go around, and the big players already capture most of the deal flow.

At the same time, operating costs have climbed. Compliance under Financial Industry Regulatory Authority (FINRA) oversight demands ongoing reporting, audits, and data-security measures. 

However, technology is shifting the equation slightly. Modern portal software, white-label solutions, and automation tools have lowered the technical barrier to entry. Entrepreneurs can now build compliant portals more quickly and affordably than they could a few years ago, provided they can source high-quality deal flow and gain investor trust.

Is there still room for new Reg CF platforms?

The general crowdfunding market is saturated. It leaves little room for another all-purpose player. Still, there’s space for platforms that serve clear niches the prominent names overlook.

A new platform could find success by focusing on a regional market or on a specific investor group, such as impact investors, veterans, or women-led startups. Others might stand out by utilizing advanced tools such as AI for deal screening, blockchain for compliance, or tokenized secondary markets for enhanced liquidity.

The key is focus and quality. A platform that consistently attracts credible issuers and provides a transparent, trustworthy experience for investors can still succeed, even without massive scale. 

How to launch a Reg-CF crowdfunding platform with LenderKit

Launching a new Reg CF platform in 2025 may seem difficult, but providers like LenderKit make it far more practical. LenderKit offers white-label crowdfunding software that helps fintech entrepreneurs and firms launch compliant investment portals quickly and affordably.

It includes all the essentials: investor onboarding, KYC/AML checks, issuer dashboards, deal management, and payment workflows. 

LenderKit supports equity, debt, and donation campaigns as well as various exemptions such as Reg CF, Reg A/A+ or Reg D offerings.

For founders testing the market, LenderKit allows a small launch with customizable branding and scalable infrastructure. Instead of building everything from scratch, operators can start lean, attract early users, and refine their model.

In today’s mature Reg CF market, success depends on efficiency and focus. LenderKit gives new entrants a solid, compliant foundation to build trust, serve their audience, and compete through specialization. 

To learn more about how it works or discuss details, please contact our team.