When you decide to fundraise under Title III of the Jumpstart Our Business Startups (JOBS) Act, you are required to file certain information with the Securities and Exchange Commission (SEC) and provide enough information to investors and the intermediary facilitating the offering to launch a Regulation CrowdFunding (Reg CF) campaign. While it may sound complicated, it is actually a pretty straightforward task. Here at Startwise, we wanted to provide you with some actionable tips:Learn more about Fundraising under Regulation Crowdfunding or How to attract funders to your campaign.
Filing Form C:
- The Form is filed online using The Edgar online filing system. Use this link to request CIK access codes and remember the passphrase and password you are using: the EDGAR online filing system. You can access Information for filers to learn more on getting started. Keep in mind that it may take 2-3 business days for EDGAR to generate the codes.
- Once you have the codes, log in here: EDGAR Login
Note that EGDAR doesn't work weel with Chrome browser, you can find tips here: https://www.sec.gov/info/edgar/quick-reference/edgar-browser-quick-reference-guide.pdf
- The Form C has 2 parts: the Form C and the Optional Question and Answer section.
- You can fill out the Form C park one electronically.
- For the optional question and answer section, you might want to consider using a Disclosure format similar to this template. This type of format enables you to disclose all the required information specifically for a revenue sharing deal. Make sure you edit all the fields in yellow. Just upload it to the system. Make sure there are no hyperlinks in the document.
While completing the general information about your business, you need to make sure to disclose, among other things:
- Business Plan with detailed description of the business and plans for the use of proceeds;
- Information about officers and directors (including their history with the company, business experience for the past three years and other information) as well as owners of 20% or more of the company;
- Financial Condition and Information including financial statements of the company and the company’s tax returns, reviewed by an independent public accountant, or audited by an independent auditor, depending on the target offering amount. If you are raising:
- $100,000 or less: Financial statements of the issuer and certain information regarding their federal income tax returns, both certified by the principal executive officer. If, however, financial statements of the issuer are available that have either been reviewed or audited by a public accountant that is independent of the issuer, the issuer must provide those financial statements instead.
- More than $100,000 but less than $500,000: Financial statements reviewed by a public accountant that is independent of the issuer. If, however, financial statements of the issuer are available that have been audited by a public accountant that is independent of the issuer, the issuer must provide those financial statements instead.
- More than $500,000:
a) For first-time Regulation Crowdfunding issuers: Financial statements reviewed by a public accountant that is independent of the issuer, unless financial statements of the issuer are available that have been audited by an independent auditor.
b) For issuers that have previously sold securities in reliance on Regulation Crowdfunding: Financial statements audited by a public accountant that is independent of the issuer.
- Details of the offering including the price to the public of the securities or the method for determining the price, the target offering amount, the deadline to reach the target offering amount, and whether the company will accept investments in excess of the target offering amount;
- Certain related-party transactions; and other information required by the Form C.
Why are the types of Form C?
When you are filing the Form C, it has options to mark it as:
- Form C - Offering Statement - your initial offering disclosure.
- Form C-U - Updates to Form C with information on the progress toward reaching the Target Amount within 5 business days after reaching 50% and 100% of the offering.
- Form C-A - If a material change or update occurs, you should amend the Disclosure and file it market as Form C-A within 5 business days.
For more information for the Issuers under Regulation Crowdfunding, please review SEC Compliance Guide.
Feel free to contact Catherine at firstname.lastname@example.org if you have any questions.