Promoting your community round compliantly

If you’re raising a Community Round under Regulation Crowdfunding, there are a few rules you need to keep in mind when promoting your round. You should read this whole article carefully, but here are the top points to keep in mind: 1. Avoid hyperbole and misleading statements (ex. “The BEST donuts in the world!”) 2. Avoid unsubstantiated claims and projections (ex. “We’re going to bigger than Dunkin' Donuts by next year!” or “Guaranteed returns!”) 3. Before your Form C has been filed while in Testing the Waters, make sure to include the legal disclosure in all your promotions 4. After your Form C has been filed, do not discuss the terms of the offering off Wefunder ## Before you file your Form C: Testing the Waters After setting up your Deal Page, the next step to raising your Community Round is to gauge investor interest through Testing the Waters (“TTW”). During the TTW phase, you can gain reservations for investments and feedback from investors before filing your Form C. The main thing you need to keep in mind when promoting your TTW raise, is that you must include the following legal disclosure in your communications: > "We are 'testing the waters' to gauge investor interest in an offering under Regulation Crowdfunding. No money or other consideration is being solicited. If sent, it will not be accepted. No offer to buy securities will be accepted. No part of the purchase price will be received until a Form C is filed and only through Wefunder's platform. Any indication of interest involves no obligation or commitment of any kind." For example, if you’re sending an email to a few people in your network about your Community Round, make sure to include the TTW legal disclosure in the footer. **On Twitter or other character-limited platforms**, you can use this shorter version and link to the full disclosure: > "See here for important legal disclosures: https://help.wefunder.com/hc/t6vc02j1gl/article/d5a5b992-testing-the-waters-legal-disclosure" Also, we will need to include copies of all the communications you send out about your Community Round while in TTW, so make sure to keep track of everything you send or post. If, for example, you send out the same template email to multiple people, we’ll just need to include the template itself in the Form C filing so don’t worry about keeping track of every single email. ## After your Form C is filed Once you’ve filed your Form C, you no longer need to worry about the TTW legal disclosure. However, you need to make sure to avoid discussing the terms of the round on any communications or promotions made off of Wefunder. So, what’s considered terms? - the amount of securities offered - the type or nature of the securities (ex. SAFE, preferred stock) - the price of the securities - the closing date of the round - the planned use of proceeds - the progress toward meeting your funding target In layman’s terms, this means that you can’t say things like “Invest for $10 per share”, “We’ve already raised $1M on Wefunder”, or “We’re closing next week, invest now.” Instead, the focus of your promotions should be on your company and why it’s so great, and then direct potential investors to your Wefunder page to see the full investment details. ## Examples So, how does this actually look in practice? Here are a couple examples of good and bad promotions: **Good:** - “SunSipz is thrilled to invite our patrons to invest in our business. We’ve loved serving our community for 5 years and want to share our success with those who’ve supported us. Check out our Wefunder pitch to see the details and invest! www.wefunder.com/sunsipz” - An “Invest in Us” button or banner on your website that links to your Wefunder page. - “We love our customers more than anything. That’s why we wanted to give you all a chance to invest in our restaurant. Check us out on Wefunder.” **Bad:** - “Invest in us now - Early investors get preferred shares at a 20% discount. Limited time offer!” - “We’re going to 10x growth next year, invest now to see huge returns!” - “Don’t miss out! Our Wefunder Community Round ends tomorrow.”