How to Ensure Your Marketing is Compliant During an Equity Crowdfunding Raise

You may be wondering, “Why is a marketing agency talking about compliance?”.

We’re obviously not lawyers, but it is pivotal that compliance is offered at the forefront of your marketing planning.

Now we are not soliciting any legal or financial advice today. The purpose of the webinar is to give you a good introduction to the most common rules so you can better plan your campaign and protect yourself from trouble.

Today we’re going to cover some of the basics and get into some of the tactics that you can use to ensure that your marketing is compliant.

Why is Compliance Important?

If you’re going to run an equity crowdfunding campaign, then you need to be aware of all the restrictions.

With the SEC enforcing strict regulations on what you can and can’t say, running an equity crowdfunding campaign is much different than your traditional marketing campaign.

When you are creating your marketing campaign, it is important to make sure it is compliant with current regulations regarding the promotion of securities. If you do not comply with these guidelines, then you do not only risk your investments but are also subject to penalties from the Securities and Exchange Commission (SEC).

What Can You Say Before the Launch?

Do not publicly or privately mention your equity crowdfunding raise if it is not a test-the-waters campaign!

That might sound obvious, but you would be surprised at how frequently founders get this wrong. By “publicly mention”, we mean:

  • Put a link to your offering on Linkedin, Facebook, Twitter, Instagram, etc.
  • Email your extended network and encourage them to invest.
  • Post your offering in any online group.
  • Encourage friends or family to share or forward the offering to anyone they know.

By “privately mention”, we mean:

  • Mention the offering to people you meet for the first time, such as at networking events, conferences, meetups, etc.
  • Contact anyone who has done business with you in the past and ask them to invest.

Now, What Can You Say After?

The two types of communications that are permitted by the SEC post-launch falls into two categories:

  • Communications that don’t mention the “terms of the offering” (Non-Terms).
  • Communication that just contains “tombstone” information (Terms).

A term, or you’ll also hear it referred to as tombstone information, is communications regarding the share price of a particular equity. As stated earlier, Non-Terms are any communications that do not mention terms.

In addition, it’s also very important to mention that mixing terms and non-terms in your marketing communications is a no-no.

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