annual change in the Consumer Price 
Index for All Urban Consumers published 
by the Bureau of Labor Statistics, or less; 
or 
‘‘(ii) if the issuer provides potential 
investors with audited financial statements, 
$2,000,000, as such amount is adjusted by 
the Commission to reflect the annual 
change in the Consumer Price Index for 
All Urban Consumers published by the Bu-
reau of Labor Statistics, or less; 
‘‘(B) the aggregate amount sold to any in-
vestor in reliance on this exemption within the 
previous 12-month period does not exceed the 
lesser of— 
‘‘(i) $10,000, as such amount is ad-
justed by the Commission to reflect the an-
nual change in the Consumer Price Index 
for All Urban Consumers published by the 
Bureau of Labor Statistics; and 
‘‘(ii) 10 percent of such investor’s an-
nual income; 
‘‘(C) in the case of a transaction involving 
an intermediary between the issuer and the in-
vestor, such intermediary complies with the re-
quirements under section 4A(a); and 
‘‘(D) in the case of a transaction not in-
volving an intermediary between the issuer and 
the investor, the issuer complies with the re-
quirements under section 4A(b).’’. 
(b) 
REQUIREMENTS
TO
QUALIFY
FOR 
CROWDFUNDING EXEMPTION.—The Securities Act of 
1933 is amended by inserting after section 4 the following: 
‘‘SEC. 4A. REQUIREMENTS WITH RESPECT TO CERTAIN 
SMALL TRANSACTIONS. 
‘‘(a) REQUIREMENTS
ON
INTERMEDIARIES.—For 
purposes of section 4(6), a person acting as an inter-
mediary in a transaction involving the offer or sale of secu-
rities shall comply with the requirements of this subsection 
if the intermediary— 
‘‘(1) 
warns 
investors, 
including 
on 
the 
intermediary’s website used for the offer and sale of 
such securities, of the speculative nature generally 
applicable to investments in startups, emerging busi-
nesses, and small issuers, including risks in the sec-
ondary market related to illiquidity; 
‘‘(2) warns investors that they are subject to 
the restriction on sales requirement described under 
subsection (e);
‘‘(3) takes reasonable measures to reduce the 
risk of fraud with respect to such transaction; 
‘‘(4) 
provides 
the 
Commission 
with 
the 
intermediary’s physical address, website address, 
and the names of the intermediary and employees of 
the intermediary, and keep such information up-to- 
date; 
‘‘(5) provides the Commission with continuous 
investor-level access to the intermediary’s website; 
‘‘(6) requires each potential investor to answer 
questions demonstrating— 
‘‘(A) an understanding of the level of risk 
generally applicable to investments in startups, 
emerging businesses, and small issuers; 
‘‘(B) an understanding of the risk of 
illiquidity; and 
‘‘(C) such other areas as the Commission 
may determine appropriate by rule or regula-
tion; 
‘‘(7) requires the issuer to state a target offer-
ing amount and a deadline to reach the target offer-
ing amount and ensure the third party custodian de-
scribed under paragraph (10) withholds offering pro-
ceeds until aggregate capital raised from investors
other than the issuer is no less than 60 percent of 
the target offering amount; 
‘‘(8) carries out a background check on the 
issuer’s principals; 
‘‘(9) provides the Commission and potential in-
vestors with notice of the offering, not later than the 
first day securities are offered to potential investors, 
including— 
‘‘(A) the issuer’s name, legal status, phys-
ical address, and website address; 
‘‘(B) the names of the issuer’s principals; 
‘‘(C) the stated purpose and intended use 
of the proceeds of the offering sought by the 
issuer; and 
‘‘(D) the target offering amount and the 
deadline to reach the target offering amount; 
‘‘(10) outsources cash-management functions to 
a qualified third party custodian, such as a broker 
or dealer registered under section 15(b)(1) of the 
Securities Exchange Act of 1934 or an insured de-
pository institution; 
‘‘(11) maintains such books and records as the 
Commission determines appropriate; 
‘‘(12) makes available on the intermediary’s 
website a method of communication that permits the
issuer and investors to communicate with one an-
other; 
‘‘(13) provides the Commission with a notice 
upon completion of the offering, which shall include 
the aggregate offering amount and the number of 
purchasers; and 
‘‘(14) does not offer investment advice. 
‘‘(b) REQUIREMENTS
ON ISSUERS
IF NO INTER-
MEDIARY.—For purposes of section 4(6), an issuer who 
offers or sells securities without an intermediary shall 
comply with the requirements of this subsection if the 
issuer— 
‘‘(1) warns investors, including on the issuer’s 
website, of the speculative nature generally applica-
ble to investments in startups, emerging businesses, 
and small issuers, including risks in the secondary 
market related to illiquidity; 
‘‘(2) warns investors that they are subject to 
the restriction on sales requirement described under 
subsection (e); 
‘‘(3) takes reasonable measures to reduce the 
risk of fraud with respect to such transaction; 
‘‘(4) provides the Commission with the issuer’s 
physical address, website address, and the names of