Can I sell or transfer my investment before the company exits?

Usually not quickly, and never with any guarantee. Investments made through Regulation Crowdfunding (Reg CF) are designed to be held, so you should only invest money you can leave in place for years.

The first 12 months

SEC rules generally prohibit you from transferring Reg CF securities for one year from the date they were issued. The limited exceptions allow a transfer:

• back to the company that issued the securities
• to an accredited investor
• as part of an offering registered with the SEC
• to a member of your family or the equivalent, to a trust you control or one created for a family member’s benefit, or in connection with death, divorce, or a similar circumstance

After the first year

Once the one-year restriction ends, you may resell your securities, but there is no organized public market for them and no buyer is guaranteed. Secondary market platforms for crowdfunding securities have emerged and are growing, but trading remains thin: you may wait weeks or months for a buyer, and you may have to accept a discount to your original price. Our secondary market crowdfunding guide explains how these marketplaces work and what to realistically expect.

How investors usually get returns

For most Reg CF investors, returns come from an event at the company level rather than from selling shares yourself. Examples include an acquisition, a property sale or refinance, ongoing distributions, a share buyback offered by the company, or, rarely, an IPO. None of these is guaranteed, and many companies never reach an exit. Our guide to crowdfunding exit strategies walks through five common paths and the risks of each.

The practical takeaway: treat a Reg CF investment as illiquid for its full duration. These securities are speculative and involve a high degree of risk, including the possible loss of your entire investment. For more on evaluating offerings before you commit, see our investor education resources, or reach out through support if you have a question about an investment you hold.