Basic Guidelines for Marketing

Before “Test the Waters” or officially filing your Form C

The SEC Limits on Advertising and Promoters have strict rules about advertising and marketing.  You can continue normal marketing for your company but you should make NO public mention of your offer or even your intention to run an Offer on your website, through email or social media until you have either set up a “Test the Waters” or filed your Form C with the EquityVest platform.  The SEC deems any public posts or communication about a yet to be launched offering to be a direct violation of the regulation. Their goal is to protect investors by insuring that your pitch on EquityVest is the one and only source of information about your Offer.

After launching Your “Test the Waters” or Filing Your Form C

Once we set up your Test the Waters Offer or, if you choose to forgo that step, your Official Offer after filing your Form C keep the following five basic rules in mind when advertising your Offer:

  1. No hyperbole or misleading statements. Be measured with your words and do not use adjectives.  Avoid absolute statements or any guarantees.  Do not imply a good outcome and be balanced in what you say. If you mention a potential positive attribute, mention the associated risks.
  2. Either “terms” or “non-terms”, you cannot combine both in the same message. We think you are better off to stick to non-terms in your marketing and point them to your Offer on EquityVest to get the terms (See below for the difference).
  3. Include this disclaimer in all communications during your Test the Waters stage: 

(Name of your company) is considering a capital raise and is “testing-the-waters” under regulation crowdfunding to evaluate investor interest. No money or other consideration is being solicited, and if sent in response, will not be accepted. No offer to buy the securities can be accepted and no part of the purchase price can be received until the offering statement is filed and only through the EquityVest platform. An indication of interest submitted via the “Reserve your Investment” button on our offer page involves no obligation or commitment of any kind.

  1. Get screenshots of all communication during “Test the Waters”; they must be filed with your Form C.
  2. Include a link to your Offer on EquityVest in all of your marketing.\

What Are “Terms Communications”

If you choose to include any of the terms of your Offer in a marketing piece then that marketing piece is limited to what is known as a “Tombstone Communication” and can include ONLY the following four types of statements and NOTHING more:

  • A statement that you are conducting an offering
  • A link to your Offer on EquityVest
  • Any of the terms of you Offer
  • Factual information about the legal identity and business location of the issuer, limited to the name of the issuer of the security, the address, phone number and website of the issuer, the email address of a representative of the issuer and a brief description of the business of the issuer.

Here is what the SEC considers “terms” of your Offer.  If you mention even one of these in your communication then you are limited to the above list of statements

  • the amount of securities offered
  • the nature of the securities (SAFE, debt, convertible notes, etc.)
  • the price of the securities
  • the closing date of the offering period
  • the planned use of proceeds
  • the issuer’s progress toward meeting its funding target

Again, we think you are better off to keep your marketing efforts to non-terms communications and point them to your Offering Page on EquityVest for the terms.

What Are “Non-terms Communications”

These are “soft” ads where you can tell your story, highlight your mission, talk about your growth and what makes your company unique.  You can even share some metrics of past performance and success (but no future projections).   Your “call to action” should be something like, “We’re raising capital for (the business) on EquityVest!  Get all the details and how you can invest at (link to your offer).

Just remember in “Non-Terms Communications”:

  • No terms or indications of terms (Do not say, “Become an owner” that indicates you are selling equity and that is a term).
  • No hyperbole or misleading statements (Do not say, “We’re the MOST or the BEST, etc.).
  • Include the link to your EquityVest Offer Page in all your advertising.
  • No language that implies a sense of urgency (no “hurry,” “Invest now,” “time is running out”).

Question and Answers

Reg CF requires that there be an active Question and Answers (Q&A) section on your Offer page and they want you to use it!  Any questions that you get through email or social media about your Offer should be referred to the Q&A on you Offer page.  The idea here is that everybody gets access to the same information…no side conversations.  Here, you may communicate all you want with potential Investors about the terms of the offering, answer questions and provide company information as requested. Anybody from your company and any paid representatives you hire to promote your campaign must identify themselves as such on the page.

Want More Info?

This was our best attempt to simplify the rules.  If you want a more detailed description with examples, Crowdcheck, a company that specializes in Reg CF wrote an in-depth piece on Communication Guidelines that you might find helpful