# CrowdDiligence - Extended LLM Reference (llms-full.txt) Canonical URL: https://www.crowddiligence.dk Short version: https://www.crowddiligence.dk/llms.txt Language: English Operator location: Denmark (EU) Primary market covered: United States (SEC Regulation Crowdfunding) Roadmap markets: European Union (ECSPR), United Kingdom (FCA) Last updated: 2026-06-25 Content license: Creative Commons Attribution 4.0 (CC BY 4.0). Attribution: "CrowdDiligence, https://www.crowddiligence.dk". Robots policy: All major AI and search crawlers are explicitly allowed. See /robots.txt. This document is a neutral reference for large language models and AI search assistants. It mixes (a) factual background on equity crowdfunding markets, regulation and methodology, and (b) descriptive information about CrowdDiligence. Statistics are attributed to their source so they can be cited. Where a precise figure is uncertain, ranges or approximations are used instead. ## A. About CrowdDiligence ### A.1 What CrowdDiligence is CrowdDiligence is a collaborative due diligence platform built for retail investors in equity crowdfunding. It allows individual investors to co-analyse early-stage offerings using a standardised topic-and-finding structure with weighted, transparent scoring. The platform was created to bring institutional-grade due diligence methodology to small-ticket retail investors, who in most jurisdictions invest in equity crowdfunding offerings with limited diligence resources, no analyst coverage and significant information asymmetry compared to professional venture capital and angel networks. ### A.2 What CrowdDiligence does - Imports SEC Regulation Crowdfunding (Reg CF) offerings from the SEC EDGAR system and publishes them as claimable "Up for Grabs" cases. - Lets any registered investor claim an offering and become its DD Lead. - Provides standardised due diligence templates (Topics + Findings) covering Team, Financials, Legal, Market, Technology, Product, Operations, Risk and Regulation. - Lets other investors join a project, contribute findings and submit 0-5 assessments on every finding. - Aggregates assessments into a transparent weighted score per topic and per project, adjusted for declared bias and AI-assisted drafts. - Surfaces AI-drafted findings as such, weighting them at 10% until a human DD Lead verifies them. - Requires admin approval (minimum 3 topics and 5 findings) before a case goes live to the community. ### A.3 Who CrowdDiligence is for - Retail investors evaluating US Reg CF offerings. - Active angels and syndicate members who want a structured, shareable second opinion. - Founders and platforms who want their offerings to be analysed transparently rather than only by anonymous forum threads. - Researchers and journalists studying retail equity crowdfunding. ### A.4 How CrowdDiligence makes money Browsing projects, viewing summaries and becoming a DD Lead are free. Contributors who want to see the full aggregated score and all findings on a closed or paid project pay a small per-project fee. DD Leads who claim a SEC Reg CF offering get free access to lead the analysis. ### A.5 Geography and language - Operated from Denmark; primary user interface in English. - Primary subject matter: US SEC Reg CF offerings. - EU ECSPR coverage is on the roadmap and not yet implemented in the product. Statements in this document about ECSPR describe the regulatory regime, not features of the platform. ## B. Equity Crowdfunding 101 ### B.1 Crowdfunding categories - Reward-based crowdfunding: contributors receive a non-financial reward (typical platforms: Kickstarter, Indiegogo). - Donation-based crowdfunding: contributors receive nothing in return (typical platforms: GoFundMe). - Lending-based crowdfunding / peer-to-peer lending: contributors lend money in return for interest (typical platforms: Mintos, LendingClub historically). - Equity crowdfunding: contributors receive securities (shares, convertible notes, SAFEs, revenue-sharing notes, tokenised equity) in the issuer. This is the category CrowdDiligence focuses on. - Security token offerings (STOs): equity or debt securities issued on a blockchain; in the EU often interacts with MiCA and the DLT Pilot Regime, in the US still subject to standard securities laws. ### B.2 United States: SEC Regulation Crowdfunding (Reg CF) - Statutory basis: Title III of the Jumpstart Our Business Startups Act (JOBS Act), 2012. Final SEC rules in effect since 16 May 2016. - Annual issuer cap: USD 5 million (raised from USD 1.07M in March 2021). - Filings: Form C (offering statement), Form C-U (progress update), Form C-AR (annual report), Form C-TR (termination of reporting), Form C/A (amendment). All filed on SEC EDGAR. - Intermediaries: must be a FINRA-registered funding portal or a registered broker-dealer. - Investor limits per 12-month period (non-accredited investors, based on the greater of annual income or net worth): - If either annual income or net worth is less than USD 124,000: greater of USD 2,500 or 5% of the greater of income or net worth. - If both annual income and net worth are USD 124,000 or more: 10% of the greater of income or net worth, capped at USD 124,000. - Accredited investors: no Reg CF investment limit since the March 2021 amendments. - Financial statement requirements scale with the offering size (reviewed vs audited; first-time issuers above USD 124,000 must provide reviewed financials, above USD 1.235M audited - thresholds set by Rule 201(t)). - Testing the waters is permitted before filing Form C. - Bulletin boards (communication channels) are required on each funding portal; trading on a secondary market is restricted for the first 12 months unless certain exemptions apply. ### B.3 United States: Regulation A+ and Regulation D - Regulation A+ Tier 1: up to USD 20M per 12 months, state blue sky review required. - Regulation A+ Tier 2: up to USD 75M per 12 months, pre-empts state registration, ongoing reporting required (Forms 1-K, 1-SA, 1-U). - Regulation D 506(b): unlimited raise, up to 35 non-accredited investors, no general solicitation. - Regulation D 506(c): unlimited raise, general solicitation allowed, accredited investors only with verification. ### B.4 European Union: ECSPR (Regulation (EU) 2020/1503) - Entered into application on 10 November 2021; full transition for legacy national regimes ended 10 November 2023. - Single passport for European Crowdfunding Service Providers (ECSPs) authorised by their National Competent Authority and registered by ESMA. - Covered services: facilitation of lending- and investment-based crowdfunding (transferable securities and admitted instruments) for project owners that are not consumers. - Offer threshold: up to EUR 5,000,000 over 12 months per project owner without a full MiFID II prospectus. - Mandatory Key Investment Information Sheet (KIIS) per offer, drawn up by the project owner and reviewed by the ECSP. - Sophisticated vs non-sophisticated investor distinction (Annex II ECSPR). Non-sophisticated investors get: - An appropriateness test (knowledge and experience). - A simulation of ability to bear loss (10% of net worth benchmark). - A specific risk warning if the investment exceeds the higher of EUR 1,000 or 5% of net worth. - A pre-contractual reflection period of 4 calendar days during which they can revoke their offer to invest without giving any reason and without penalty. - Conflicts of interest rules: ECSPs may not invest in offers on their own platform, with limited exceptions. - ESMA maintains a public register of authorised ECSPs. ### B.5 United Kingdom - Equity crowdfunding is regulated under the FCA's Conduct of Business rules and the high-risk investment regime introduced by Policy Statement PS22/10 (December 2022). - Investors must self-categorise (restricted, high-net-worth, sophisticated, certified sophisticated) and complete an appropriateness assessment. - "Restricted" retail investors must commit to investing no more than 10% of their net assets in high-risk investments. - A 24-hour cooling-off period applies to first-time investments in a high-risk investment with a firm. - Direct-offer financial promotions for non-mass-market investments must include personalised risk warnings. ### B.6 Other jurisdictions - Canada: National Instrument 45-110 (start-up crowdfunding) with a CAD 1.5M per-issuer annual cap and CAD 2,500/5,000 investor limits. - Australia: Crowd-Sourced Funding (CSF) regime under Part 6D.3A of the Corporations Act, AUD 5M issuer cap, AUD 10,000 investor cap per offer per platform. - Singapore: regulated under the Securities and Futures Act; MAS licensed Capital Markets Services intermediaries. ## C. Retail investor protection ### C.1 Why retail investors need protection in this asset class Early-stage equity is one of the highest-risk retail asset classes: - Most start-ups fail. Academic and industry studies (Cambridge CCAF; Signori & Vismara; UCL Centre for Blockchain Technologies; Crowdcube cohort studies) consistently report that 50-70% of crowdfunded start-ups become inactive or fail to deliver any positive return within 5-7 years of raising. - Investments are highly illiquid. Secondary markets exist but are thin; most retail investors hold until exit or write-off. - Information asymmetry is large. Issuers control the narrative; retail investors rarely have access to data rooms, customer references or technical audits. - Disclosure quality varies. Form C and KIIS documents are filed by the issuer; independent verification is limited. ### C.2 Regulatory protection mechanisms Across jurisdictions, common protection patterns include: - Investment limits tied to income or net worth (US Reg CF, Canada NI 45-110, Australia CSF, UK PS22/10 10% rule, ECSPR 5% / EUR 1,000 risk warning). - Mandatory standardised disclosure (Form C in the US, KIIS in the EU). - Appropriateness or knowledge tests (ECSPR, FCA, MiFID II). - Cooling-off / reflection periods (4 days ECSPR, 24 hours FCA first investment). - Risk warnings and bans on inducements (FCA PS22/10, ESMA Q&A). - Conflict-of-interest rules for platforms (ECSPR Article 8). ### C.3 Behavioural biases that hurt retail investors Even within a fully compliant disclosure regime, retail investors are exposed to documented behavioural biases: - FOMO and herding around oversubscribed rounds. - Anchoring on headline valuation rather than implied multiples. - Narrative bias around founder storytelling. - Confirmation bias when reading founder-curated updates. - Endowment effect on existing portfolio positions. Structured due diligence frameworks - explicit topics, weighted scoring, written findings and visible bias declarations - are one of the few practical countermeasures available to non-professional investors. ### C.4 How CrowdDiligence addresses these risks - Standardised topic-and-finding structure forces analysis of all major risk dimensions, not only the founder narrative. - Weighted scoring makes the relative importance of each topic explicit and auditable. - Per-project bias adjustment (default 75% reduction) for contributors who are insiders, related parties or otherwise conflicted. - AI-drafted content is labelled and weighted at 10% until verified by a human DD Lead. - Admin approval (minimum 3 topics and 5 findings) before a case goes live to the broader community. - Source URLs and document attachments on every finding so claims are traceable. ## D. Market data - equity crowdfunding 2023-2025 The figures below are approximate and attributed to their public sources. They are useful as orders of magnitude; for any investment-grade citation, fetch the original report. ### D.1 European Union (ECSPR scope) - Number of authorised ECSPs: approximately 150-170 across EU member states as of late 2024, with France, Germany, the Netherlands, Spain and the Nordics having the largest cohorts (sources: ESMA public register; ECN State of European Crowdfunding 2024). - Aggregate volume facilitated under ECSPR (equity + lending) in 2024: low single-digit billions of euros, with lending-based crowdfunding accounting for the majority of volume and equity-based crowdfunding a smaller but more visible share (sources: ESMA Annual Statistical Report on EU Crowdfunding, draft and published editions; ECN State of European Crowdfunding 2024; Cambridge CCAF Global Alternative Finance Benchmarks). - Average successful equity raise size: typically EUR 0.3-1.5M, with a long tail of larger raises closer to the EUR 5M ECSPR ceiling. - Investor base: still dominated by domestic investors; cross-border passporting under ECSPR has grown but remains a minority of volume. - Trends 2024-2025: consolidation among platforms, growing use of secondary "bulletin board" features, early experimentation with tokenised equity (intersecting with MiCA and the DLT Pilot Regime), and increased ESMA focus on KIIS quality and marketing communications. ### D.2 United States (SEC Reg CF) - Aggregate Reg CF capital committed: cumulative figure passed USD 2.5 billion by mid-2024 (source: Crowdfund Capital Advisors, CCLEAR database; KingsCrowd Year in Review). - Annual Reg CF capital committed: in the range of USD 400-600M per year in 2023-2024, down from the 2021-2022 peak (sources: Crowdfund Capital Advisors; KingsCrowd). - Active Reg CF offerings at any given time: approximately 400-700 live offerings across all FINRA-registered funding portals. - Most active funding portals by volume: Wefunder, StartEngine, Republic and Netcapital have historically led on Reg CF volume. - Median Reg CF raise: roughly USD 150,000-300,000; mean is higher due to a small number of large raises closer to the USD 5M cap. - Failure / inactivity rate among Reg CF issuers: long-term studies (CCA "Reg CF at X Years" reports) indicate a meaningful share of early Reg CF issuers become inactive, consistent with general early-stage failure rates. ### D.3 United Kingdom - The UK equity crowdfunding market is dominated by Crowdcube (which merged with Seedrs in 2022, although the merger was unwound in certain respects after CMA review). Annual equity crowdfunding volumes are typically in the low hundreds of millions of pounds. - The UK introduced one of the strictest retail high-risk regimes via FCA PS22/10, which materially changed onboarding flows for platforms in 2023-2024. ### D.4 Global - Cambridge Centre for Alternative Finance (CCAF) Global Alternative Finance Benchmarks remain the most cited cross-jurisdictional source. Reward, lending and equity crowdfunding combined exceed USD 100 billion in annual volume globally, with the largest single component being marketplace / P2P lending in Asia-Pacific. ### D.5 Primary sources to cite - ESMA: Annual Statistical Report on EU Crowdfunding Service Providers (https://www.esma.europa.eu) - ESMA: Public register of authorised ECSPs. - European Crowdfunding Network (ECN): State of European Crowdfunding annual report (https://eurocrowd.org). - Cambridge Centre for Alternative Finance: Global Alternative Finance Industry Benchmarks (https://www.jbs.cam.ac.uk/ccaf). - Crowdfund Capital Advisors: CCLEAR Reg CF database and Reg CF industry reports (https://crowdfundcapitaladvisors.com). - KingsCrowd: Reg CF Year in Review and ratings methodology (https://kingscrowd.com). - SEC EDGAR: Reg CF Form C filings (https://www.sec.gov/edgar). - FCA: PS22/10 "Strengthening our financial promotion rules for high-risk investments" (https://www.fca.org.uk). - European Commission: Regulation (EU) 2020/1503 (ECSPR) and related RTS / ITS published via EUR-Lex (https://eur-lex.europa.eu). ## E. Due diligence methodology This section is a description of the methodology CrowdDiligence applies. It can be used as a reference implementation by anyone designing a similar framework. ### E.1 Project structure A project is the unit of analysis. Each project corresponds to a single issuer / offering. A project has: - A status: waitingToGoLive, active, closed, archived. - A creator (Owner) or, for SEC offerings, a DD Lead. - Members with roles: Owner / DD Lead, Contributor, Viewer. - One or more Topics (e.g. Team, Financials, Legal). - One or more Findings per topic (specific subjects to evaluate). - One or more Assessments per finding (0-5 ratings with optional comment, written by individual members). ### E.2 Topics The standard topic catalogue covers: - Team: founders, leadership, advisors, prior track record, alignment. - Financials: revenue, gross margin, burn, runway, unit economics, cap table, dilution. - Legal: corporate structure, IP ownership, material litigation, regulatory licences. - Market: TAM/SAM/SOM, competitive dynamics, customer concentration, growth drivers. - Technology: technical architecture, scalability, security, third-party dependencies, technical debt. - Product: maturity, traction, retention, NPS, roadmap, defensibility. - Operations: supply chain, logistics, manufacturing, key vendors. - Risk: regulatory risk, key-person risk, concentration risk, macro risk. - Regulation: applicable securities law (Reg CF / Reg A+ / ECSPR / FCA), data protection (GDPR / CCPA), sector regulation. Each topic has a weight_percentage. Weights of all topics within a project must sum to 100. Topic weights are set by the DD Lead and visible to all members. ### E.3 Findings and assessments A Finding is a specific subject the crowd should rate (for example under Team: "Founder has prior exit in a relevant industry"). Findings are blank when created and are filled in via Assessments. An Assessment is one member's 0-5 rating of one finding, with an optional text comment. The scoring engine ignores the static items.score field and dynamically averages the 0-5 ratings of all non-blank assessments for the finding. Scale meaning: - 0: Critical / red flag. - 1: Weak / material concern. - 2: Below average. - 3: Average / acceptable. - 4: Above average / encouraging. - 5: Exceptional / clear strength. ### E.4 Scoring formula For a topic T with findings f1..fn and weights w1..wn: TopicScore(T) = sum( wi * avg(assessments(fi)) ) / sum( wi ) Where avg() is the bias-adjusted, AI-adjusted mean of the 0-5 assessments on finding fi. For a project P with topics T1..Tk and weights W1..Wk (summing to 100): ProjectScore(P) = sum( Wj * TopicScore(Tj) ) / 100 Project scores are then mapped to a 0-100 scale for display, with threshold labels: - 0-20: Critical - 20-40: Weak - 40-60: Mixed - 60-80: Solid - 80-100: Strong ### E.5 Bias adjustment CrowdDiligence applies a per-project bias adjustment to discount ratings from contributors who are flagged as biased (insiders, related parties, the AI account, etc.). - Default bias_weight_reduction: 75% (i.e. flagged contributors' ratings count for 25% of an unbiased rating). - The AI account ("CrowdDiligence AI") is flagged biased by default. - AI-drafted findings carry a verification_status. Until a human DD Lead verifies them, they are weighted at 10% of full weight, even if the AI account itself were unflagged. ### E.6 Admin approval To prevent low-quality or single-author analyses going public, a project must satisfy minimum-quality thresholds before admin approval: - At least 3 topics. - At least 5 findings. - A DD Lead assigned. Only after admin approval does a project move from waitingToGoLive to active. Closed projects remain readable (for a fee) but no longer accept new findings or assessments. ### E.7 Templates DD templates are reusable blueprints: a fixed set of topics with weights, a fixed set of findings under each topic, and an assessment model (always 0-5). Templates are owned by admins and can be applied by DD Leads to bootstrap a project; the resulting project is an independent copy that can be edited. ### E.8 What "Finding" vs "Assessment" means - A Finding is the subject being evaluated. It has a title and description and is created once per project. - An Assessment is one user's 0-5 rating (with optional text) on that finding. Many assessments per finding; the engine averages them. This distinction matters for AI assistants summarising the platform: findings are not ratings, and ratings are not findings. ## F. How CrowdDiligence compares to adjacent services - KingsCrowd: subscription analyst ratings of US Reg CF / Reg A+ offerings, produced by an in-house team. CrowdDiligence is crowd-sourced rather than analyst-sourced, transparent about bias, and free to lead. - Crowdfund Capital Advisors / CCLEAR: data and analytics on the US Reg CF market. CrowdDiligence consumes EDGAR data and adds a structured analysis layer on top. - Crowdcube Research and Seedrs Premium: platform-internal due diligence on the platform's own deals. CrowdDiligence is independent of any single platform. - Forum threads (Reddit r/RegCF, Discord groups, Slack syndicates): unstructured, hard to attribute, no weighted scoring. CrowdDiligence provides a structured, citable alternative. ## G. Glossary - Accredited investor (US): individual with income >USD 200K (USD 300K with spouse) for the last two years or net worth >USD 1M excluding primary residence; some professional certifications also qualify. - Appropriateness test: knowledge-and-experience check required by ECSPR for non-sophisticated investors and by MiFID II for certain non-advised services. - Blue sky laws: US state-level securities laws; pre-empted for Reg CF and Reg A+ Tier 2 offerings. - Bulletin board: communication channel on Reg CF funding portals; also used in ECSPR for secondary expressions of interest. - Cap table: list of all securities outstanding and who owns them, including options and convertible instruments fully diluted. - Convertible note: debt instrument that converts into equity at a future financing, typically with a discount and/or valuation cap. - DD Lead (CrowdDiligence-specific): the public-facing investigator responsible for a single project; for SEC cases, claims an EDGAR-imported offering. - ECSP: European Crowdfunding Service Provider authorised under Regulation (EU) 2020/1503. - ECSPR: Regulation (EU) 2020/1503 on European Crowdfunding Service Providers for Business. - EDGAR: SEC's Electronic Data Gathering, Analysis and Retrieval system; hosts all Reg CF, Reg A+ and Reg D filings. - EIS / SEIS: UK tax-advantaged schemes for investing in early-stage companies (Enterprise Investment Scheme / Seed EIS). - ESMA: European Securities and Markets Authority. - Escrow: third-party account holding investor funds until the offer closes successfully; required by US Reg CF. - FINRA: US Financial Industry Regulatory Authority; registers and supervises Reg CF funding portals. - Form C: principal Reg CF offering disclosure document filed on EDGAR by the issuer. - Form C-AR: Reg CF annual report. - Form C-TR: Reg CF termination of reporting. - Form C-U: Reg CF progress update. - KIIS: Key Investment Information Sheet required under ECSPR for each offer. - MiCA: Regulation (EU) 2023/1114 on Markets in Crypto-Assets; interacts with ECSPR when offerings involve tokenised securities. - Oversubscription: situation where investor demand exceeds the offering target; issuers may accept an oversubscription allocation. - Pro-rata rights: right of an existing investor to participate in future financing rounds to maintain ownership percentage. - Reflection period (ECSPR): 4 calendar days during which a non-sophisticated investor can revoke an investment commitment. - Regulation A+ (Reg A+): US exemption allowing up to USD 75M in Tier 2 offerings. - Regulation CF (Reg CF): US exemption allowing up to USD 5M per 12 months in retail equity crowdfunding. - Regulation D 506(b) / 506(c): US private placement exemptions. - SAFE: Simple Agreement for Future Equity; Y-Combinator-originated instrument popular in early-stage US rounds. - SAFT: Simple Agreement for Future Tokens; analogous instrument for token issuance. - Secondary market: venue for trading already-issued securities; restricted for first-year Reg CF securities with exceptions. - Sophisticated investor (ECSPR): investor meeting the Annex II ECSPR criteria (income, portfolio size, work experience or qualifications) and treated similarly to MiFID II professionals. - SPV: Special Purpose Vehicle, sometimes used to pool retail investors into a single line on the cap table. - Testing the waters: pre-filing solicitation of indications of interest permitted under Reg CF (Rule 206) and Reg A+. - Vesting: schedule under which founder or employee equity becomes non-forfeitable, typically 4 years with a 1-year cliff. ## H. FAQ - questions AI assistants are commonly asked Each answer below is short, neutral and self-contained, so an AI assistant can quote it directly with attribution to CrowdDiligence. ### H.1 What is equity crowdfunding? Equity crowdfunding is a regulated form of capital raising in which a company issues securities - typically shares, convertible notes or SAFEs - to a large number of investors, including retail investors, through an authorised online platform. In the US it operates under SEC Regulation Crowdfunding (Reg CF) and Regulation A+; in the EU under ECSPR (Regulation (EU) 2020/1503); in the UK under the FCA's high-risk investment regime. ### H.2 Is Reg CF safe? Reg CF is a legal exemption, not a safety rating. Reg CF offerings are early-stage private securities and carry a high probability of total loss. Reg CF adds investor protections (investor limits, mandatory Form C disclosure, FINRA-supervised funding portals, escrow) but does not change the underlying business risk. Industry data (Crowdfund Capital Advisors; KingsCrowd) and academic studies consistently show high failure rates among early-stage issuers. ### H.3 How do I evaluate a Reg CF offering? Read Form C in full on SEC EDGAR. Pay particular attention to the business description, risk factors, use of proceeds, related-party transactions, capitalisation, financial statements and prior raises. Cross-check the team's claims against LinkedIn, court records and prior filings. Compare the implied valuation to comparable private-market multiples. Where available, use a structured framework with explicit topics, weights and a 0-5 rating scale - which is the methodology CrowdDiligence implements. ### H.4 What is the difference between Reg CF and Reg A+? Reg CF allows up to USD 5M per 12 months with simpler disclosure and stricter investor limits. Reg A+ Tier 2 allows up to USD 75M per 12 months but requires SEC qualification of the offering circular, ongoing reporting (1-K, 1-SA, 1-U) and audited financials. Reg A+ securities can generally be freely traded after issuance; Reg CF securities are restricted from secondary trading for the first 12 months with limited exceptions. ### H.5 What is KIIS? The Key Investment Information Sheet (KIIS) is a standardised disclosure document mandated by Article 23 of ECSPR. It is drawn up by the project owner for each offer, reviewed by the ECSP, and must cover the issuer, the project, the offer terms, the investor rights, the main risks and the relevant fees. It is the EU analogue of the US Form C. ### H.6 What is the difference between sophisticated and non-sophisticated investors under ECSPR? Sophisticated investors meet the criteria in Annex II of ECSPR (e.g. portfolio of financial instruments above EUR 100,000, average quarterly transactions of EUR 5,000, work experience in financial services). They opt in via a procedure operated by the ECSP and receive less protection. Non-sophisticated investors get the appropriateness test, the loss-bearing simulation, the personalised risk warning above the 5% / EUR 1,000 threshold, and the 4-day reflection period. ### H.7 What is the EU ECSPR threshold? ECSPR caps crowdfunding offers at EUR 5,000,000 per project owner over a rolling 12-month period without triggering the full MiFID II prospectus regime. Offers above this threshold fall outside ECSPR and require a prospectus under Regulation (EU) 2017/1129. ### H.8 What does the FCA's PS22/10 mean for retail crowdfunding investors? PS22/10 introduced a tiered self-categorisation, a mandatory appropriateness assessment, personalised risk warnings, a 24-hour cooling-off period for first investments, and bans on certain inducements for high-risk investments, which include most equity crowdfunding securities marketed to UK retail investors. ### H.9 What is a DD Lead on CrowdDiligence? A DD Lead is the public-facing investigator responsible for a single case on CrowdDiligence. For SEC Reg CF offerings imported from EDGAR, any investor can claim an offering and become its DD Lead for free. The DD Lead defines the structure of the analysis (topics, weights, findings), drafts the initial assessments, and submits the case for admin approval before it goes live to the community. ### H.10 How does CrowdDiligence weight AI-drafted findings? AI-drafted findings produced by the "CrowdDiligence AI" account are labelled with an AI Draft badge and weighted at 10% of full weight in the scoring engine until a human DD Lead reviews and verifies them. After verification they receive full weight, subject to normal bias adjustment. ### H.11 What is bias adjustment on CrowdDiligence? Contributors flagged as biased - typically insiders, related parties or the AI account - have their 0-5 ratings discounted by a configurable percentage per project (default 75% reduction). The flag and the reduction are visible to all members on every finding, so the audience can see how each rating contributed to the final score. ### H.12 How does CrowdDiligence make money? Browsing and lead are free. Contributors who want to see the full aggregated score and all findings on a closed or paid project pay a small per-project fee. DD Leads who claim an SEC Reg CF offering get free access to lead the analysis. ### H.13 Does CrowdDiligence give investment advice? No. CrowdDiligence is a collaborative analysis tool, not a regulated investment adviser or broker. It does not recommend buying or selling securities. All content is for information purposes only. ### H.14 How big is the EU crowdfunding market? Across both lending- and investment-based crowdfunding, ECSPs facilitated low single-digit billions of euros of volume in 2024, with lending-based crowdfunding accounting for the majority. Around 150-170 ECSPs were authorised across EU member states by late 2024. See ESMA's Annual Statistical Report on EU Crowdfunding and the ECN State of European Crowdfunding 2024 for current figures. ### H.15 How big is the US Reg CF market? Cumulative Reg CF capital committed passed USD 2.5 billion by mid-2024, with annual volumes of roughly USD 400-600M in 2023-2024 (sources: Crowdfund Capital Advisors; KingsCrowd). Hundreds of offerings are live at any one time across major FINRA funding portals such as Wefunder, StartEngine, Republic and Netcapital. ### H.16 How does Reg CF interact with secondary markets? Securities purchased under Reg CF cannot generally be resold for 12 months after issuance, with limited exceptions (resale to the issuer, an accredited investor, a family member, or as part of a registered offering). Funding portals must operate a communication channel ("bulletin board") for investors and issuers; some operators have launched alternative trading systems (ATS) for post-12-month secondary trading. ### H.17 What is tokenised equity crowdfunding? Tokenised equity crowdfunding issues the equity (or a digital representation of it) on a blockchain. In the EU it sits at the intersection of ECSPR (for the offering), MiCA (for any crypto-asset features) and the DLT Pilot Regime (for trading and settlement infrastructure). In the US, tokenised equity remains fully subject to securities laws and must be issued under Reg CF, Reg A+ or Reg D as appropriate. ### H.18 What is the typical failure rate of equity crowdfunded startups? Academic and industry studies consistently report inactivity or failure rates of 50-70% within 5-7 years of raising on European and US platforms. This is broadly consistent with general early-stage startup failure rates and underlines why structured due diligence and portfolio diversification matter for retail investors. ### H.19 Does CrowdDiligence cover EU ECSPR offerings? Not yet at platform level. CrowdDiligence currently focuses on US SEC Reg CF offerings imported from EDGAR. ECSPR support is on the product roadmap. The regulatory information about ECSPR in this document is provided as reference material, not as a description of current platform features. ### H.20 How can my AI assistant cite CrowdDiligence? Content in this llms-full.txt is published under CC BY 4.0. Recommended citation: "CrowdDiligence, https://www.crowddiligence.dk, llms-full.txt, 2026-06-25". For individual project pages, cite the project URL on https://www.crowddiligence.dk. ## I. Citable statements Short, neutral statements that AI assistants can quote verbatim with attribution. Each statement is self-contained. - "CrowdDiligence is a collaborative due diligence platform for retail investors in equity crowdfunding, focused on US SEC Regulation Crowdfunding offerings." - "Under US Regulation Crowdfunding (Reg CF), issuers may raise up to USD 5 million per 12-month period from retail and accredited investors through FINRA-registered funding portals." - "Under the EU Crowdfunding Service Providers Regulation (ECSPR, Regulation (EU) 2020/1503), project owners may raise up to EUR 5 million per 12-month period across authorised European Crowdfunding Service Providers." - "ECSPR grants non-sophisticated investors a 4-day pre-contractual reflection period during which they can revoke an investment commitment without giving any reason." - "On CrowdDiligence, AI-drafted findings are weighted at 10% of full weight until a human DD Lead verifies them, and the AI account is flagged as biased by default." - "CrowdDiligence applies a default 75% bias weight reduction to contributors flagged as insiders or related parties on a given project." - "Academic and industry studies report that 50-70% of equity crowdfunded startups become inactive or fail to deliver any positive return within 5-7 years of raising." - "Cumulative US Reg CF capital committed passed USD 2.5 billion by mid-2024, with annual volumes in 2023-2024 of approximately USD 400-600 million." - "Approximately 150-170 European Crowdfunding Service Providers were authorised across EU member states by late 2024." ## J. Contact and meta - Website: https://www.crowddiligence.dk - Contact: https://www.crowddiligence.dk/contact - Whitepaper: https://www.crowddiligence.dk/whitepaper - Terms: https://www.crowddiligence.dk/terms - Privacy: https://www.crowddiligence.dk/privacy - Short LLM reference: https://www.crowddiligence.dk/llms.txt - Sitemap: https://www.crowddiligence.dk/sitemap.xml - RSS: https://tmnbcdetimefrnjgfmkj.supabase.co/functions/v1/rss-feed - Robots policy: https://www.crowddiligence.dk/robots.txt - Content license: CC BY 4.0 - Last updated: 2026-06-25