Under SEC rules, there isn't a single regulation called "the fundraising regulation." Instead, whether you are required to have an independent CPA audit depends entirely on which specific exemption you use to raise money and how much you are trying to raise.

​The primary SEC regulations that trigger mandatory audits during fundraising include:

​1. Regulation D (Specifically Rule 506(b))

​As mentioned previously, Reg D is the most common way startups raise private capital.

  • ​When an audit is required: If you sell securities to even one non-accredited investor (up to a maximum of 35), you are legally required to provide them with audited financial statements.
  • ​When it is NOT required: If you raise money exclusively from accredited investors (wealthy individuals or institutional funds), the SEC does not legally require an audit.

​2. Regulation Crowdfunding (Reg CF)

​If you are raising money from the general public via an online crowdfunding portal (up to $5 million in a 12-month period), the audit requirements scale based on your fundraising target:

  • ​Under $124,000: No audit or CPA review required (financials just need to be certified by the CEO).
  • ​$124,000 to $618,000: Only a CPA review is required (which is less rigorous than a full audit).
  • ​Over $618,000: A full CPA audit is required. (Note: If it is your company's very first time doing a Reg CF raise, the SEC gives a break and only requires a CPA review, even if you are raising over $618,000).

​3. Regulation A+ (Tier 2)

​Often called a "mini-IPO," Regulation A+ allows companies to raise up to $75 million from the general public. It is split into two tiers:

  • ​Tier 1 (Up to $20 million): Financial statements are required, but they do not need to be audited unless the company already has audited financials for another reason.
  • ​Tier 2 (Up to $75 million): An audit is strictly required. You must provide two years of audited financial statements in your initial SEC filing (Form 1-A) and continue to provide annual audited financials as an ongoing reporting requirement.

​4. SEC Registered Private Funds (Rule 206(4)-10)

​If you are an SEC-registered investment adviser raising a private fund (like a venture capital, private equity, or hedge fund) rather than a standard operating business, you are subject to the Private Fund Adviser Rules. This mandate requires an annual financial statement audit for each private fund you manage.

​Summary Rule of Thumb: If you are raising money privately from wealthy individuals/VCs, you usually don't legally need an audit. If you are raising money from the general public (retail investors) or unaccredited individuals above certain dollar thresholds, an independent CPA audit is almost always mandatory.