It means that the instrument/contract that is being assessed will be considered a "security" under applicable laws.  This means you will need to either register the offering of that security (with the SEC and applicable state regulators) or find an exemption for those registration requirements.  

Sometimes but it really depends on your particular circumstances.

Investment crowdfunding can potentially limit future financing options due to the large number of shareholders on the cap table. When a company has numerous individual investors from a crowdfunding campaign, it can complicate future fundraising efforts as new investors may be wary of coming into a situation with such a dispersed ownership structure. Additionally, managing communication and decision-making with a large number of shareholders can be challenging and time-consuming for the company's management team.

There are ways to limit the effects of both of these concerns with planning.  For instance, a company may be suited to issued non-equity securities, like revenue share notes, or might utilize transfer agents that consolidate ownership into one record holder.  You could also limit voting rights on regulated investment crowdfunding issued securities. 

Institutional and angel investors have varying views on crowdfunding.  There has been a significant shift in "acceptance" of the use of regulated investment crowdfunding by many more (but not all) institutional and angel investors.  It may also depend on the region of the country where those investors are located. 

I'd be happy to chat more about the realities as they would apply to your circumstances if you want to chat directly. 

Yes, both the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) play roles in regulating investment crowdfunding. 

The SEC oversees securities markets in the United States, ensuring that investors are protected, markets are fair, orderly, and efficient, and capital formation is facilitated. The SEC has established regulations for crowdfunding, which are designed to help smaller companies raise money while still providing protections for investors. These rules are part of Regulation Crowdfunding (Reg CF), which allows companies to offer and sell securities through crowdfunding.

FINRA, on the other hand, is a non-governmental organization that acts as a self-regulatory organization (SRO) for brokerage firms and exchange markets. FINRA is authorized by Congress to protect America’s investors by making sure the securities industry operates fairly and honestly. Within the context of crowdfunding, FINRA is responsible for regulating crowdfunding portals, which are online platforms that facilitate the offering and selling of securities through crowdfunding. Crowdfunding portals must register with the SEC and become a member of FINRA to operate legally.

Both organizations ensure that platforms adhere to the regulations set forth to protect investors and maintain the integrity of the securities market. This includes rules about who can invest, how much they can invest, and how companies can raise funds through crowdfunding.

Since the passage of the JOBS Act and the subsequent rulemaking, there has been massive confusion by the general and investing public who often conflate the activities of the regulated investment crowdfunding industry and those of rewards-based or donations-based crowdfunding platforms. Aside from marketplace confusion, there is considerable reputational risk that regulated entities, and the regulated industry as a whole, face by being mistaken for the activities happening in a less regulated environment and by unlicensed actors (e.g. GoFundMe, Kickstarter, IndieGoGo).

Furthermore, while admirable, the efforts by some industry participants to provide clarity through use of other terms (e.g. “online capital raising,” “investment crowdfunding,” or “equity crowdfunding”) are insufficient or, in some cases, potentially misleading.   

By embracing ‘Regulated Investment Crowdfunding,’ we not only clarify our industry's scope but also underline the legal and regulatory frameworks that govern our operations.