Communicating your Reg CF offering

The whole concept of the Title III Jobs Act is to allow the average person and non-experienced investor the opportunity to invest in a startup or small business. These individuals are what the industry calls non-accredited investors and what we call the crowd.

The benefit of marketing your capital raise to the crowd is the sheer market size of potential investors. The drawback of marketing to the crowd is the strict rules/guidelines put in place by the SEC for doing so. The SEC has only one goal. To protect potential investors from fraud. You need to know what you can say, how you can say it and where you can say it. Otherwise you risk violating securities laws and losing your securities exemptions. We have taken the opportunity to simplify the guidelines to the following five rules. Of course we are not securities lawyers so be sure to get additional clarification from a qualified party.

First rule:

Do not talk about your campaign until you've notified the SEC of your campaign raise. This is done through a Form C submission. The Form C is a document which lists specific details concerning your capital raise. The details will not be reviewed or approved by the SEC but will be available for all investors to view within the SEC website (EDGAR System). Any public facing communication concerning a capital raise prior to your Form C submission will be a violation of SEC securities laws. Do not post social media messages, send emails, publish press releases or speak about the future raise at conferences. Not until you have filed and published your Form C.

Second rule:

You are restricted in what you can say within two types of communications. The first is a communication piece which is called a tombstone offer. It includes only the factual terms of your offering. The second is soft communication piece which lists information about your campaign raise without listing the tombstone terms.

Tombstone communication

  • • Raising funds pursuant to Section 4(a)(6) of the Securities Act.
  • • The name of our portal where the offering is being listed and a link to your campaign page.
  • • The terms of the offering (the amount of securities offered, the nature of the securities, the price of the securities and the closing date of the offering.
  • • Factual information about the legal identity, limited to name, address, phone number and website, and a brief description of the business of the issuer.

Example:

Your Company X, Inc.
(Your Company Logo)
Your Company X is a sports company based in Anywhere, U.S.A. and incorporated on July 4, 2010. We make balls and they come in big and small. Our balls are designed to be xyz.
We are selling common shares in our company at $100 a share. The minimum amount is $50,000 and the maximum amount is $150,000. The offering will remain open until Nov 1st, 2018.
This offering is being made pursuant to Section 4(a) (6) of the Securities Act.
For additional information please visit: https://www.seedingu.com/yourcompanyx
(SeedingU Logo)

Soft communication

• Does not include deal terms
• Not misleading
• All statements can be backed up
• Includes a link to the campaign page on seedingu.com

Example:

We are doing an equity crowdfunding round! We are going to use the proceeds of our offering to create XYZ by developing ABC. The more ABC we develop, the greater potential to enter into other markets. We think we are poised for significant growth. Already we’ve received orders from 100 enterprises in the USA. Invest in us TODAY, while you still can and help us to LMNOP!
[LINK TO SEEDINGU.COM/yourcompanyx].

Third rule:

There are no restrictions on channel or medium usage for advertising your campaign. You are free to advertise anywhere you see fit. Free to use all social media networks, TV, radio, print and events. Even street corners and screaming from the rooftops are open game. Just no deal terms, only factual information and do not mislead in any way.

Fourth rule:

Your campaign page must be accurate and factual and you must link or connect all external communication pieces to your campaign page on seeindgu.com. This can be done through a button, a link, a banner or URL listing. In your campaign you cannot say anything that cannot be backed-up by facts. Every statement must not be misleading. Do not use subjective language such as "we are the greatest", "the industry is massive" and "we are the fastest growing”. Do not use superlatives ("best", "biggest", etc.) Stick to the facts.

Fifth rule:

You must answer campaign raise questions and questions about deal terms within your campaign page communication board on seedingu.com. This includes all one off fundraise questions to your email or phone as well. These questions must be redirected to the open forum. All investors must have equal access to information and potentially benefit from the information simultaneously. You are not allowed to communicate deal terms privately and outside of your campaign page.