TAKING YOUR REG CF RAISE LIVE
Funding Page
Texture Capital, as your broker dealer, will operate a funding page dedicated to your offering. You can design this yourself, or work with a third-party technology provider. We are happy to make introductions. Here’s what you need to know:
• Texture Capital must own the crowdfunding URL, for example: www.InvestInMyCompany.com. This cannot be a slug of your main website, but you can link to it from your main website. Texture can purchase the URL or you can transfer an existing URL to us, but note that sometimes a new URL cannot be transferred in the first 30 days.
• You can incorporate your own corporate branding into the funding page, but it must include the following wording at the top: “This Funding Platform is Operated by Texture Capital Inc.” and include our logo (download here)
• The funding page must include a summary of the offering including:
o Target Amount offered (this is the minimum you need to raise)
o Maximum Offering (this is the maximum you will raise)
o Minimum Investment amount
o Price per share
o Closing Date of the Offering
o Amount raised to date
• The funding page must include a link to the Form C (also known as the Offering Circular) on the SEC’s EDGAR website. (Your lawyer will prepare this with you and take care of the filing).
• The funding page must include a discussion forum (also known as Communication Channels). This is proscribed in rule § 227.204(c), and is where the SEC wants all communication between Issuer and investors to occur.
o Texture must approve all comments in the discussion forum.
o When you are responding to an investor question, you must identify yourself as a representative of the issuer.
o The discussion forum should include the following functionality:
Users must verify an email address before they can create a comment
Comments once 'created' do not appear in the 'forum' by default
An Admin (wp-admin likely) can review each comment and either approve it (in which case it becomes visible to all visitors to the site) or classify it as 'spam' in which case it is not visible, but is still stored
• You may wish to include other information on the funding page including:
o A description of the business, the products and services you provide
o A profile / biographies of the key leadership
o A market analysis section, discussing key trends in your industry
o A discussion of your strategy and how you will make money
o The use of proceeds
• You may wish to provide a video presentation – but it is important to have the script approved by Texture before the video is produced in case we require changes for compliance.
• All content on the funding page must be approved by Texture to ensure compliance with FINRA Rule 2210. This basically means that you can’t make any exaggerated statements (e.g. we’re forecasting exponential growth!); all data points have to be substantiated, and potential risks must be discussed where relevant.
• Don’t worry! Texture can help you with this process and will approve and sign off on all content.
Advertising / Communicating with Investors
• You can provide a link to the funding page from your main website, but you can only provide limited information about the offering including:
o That you are conducting a Crowdfunding offering
o The amount of securities offered
o The nature of the securities
o The price of the securities
o The closing date of the offering period
o The planned use of proceeds
o Your progress toward meeting the funding target
• You may not discuss any further information about the offering. This rule applies to verbal and email communications also. The SEC wants all communication to go through the communication channels on the funding page to ensure that everyone in ‘the crowd’ has access to the same information.
• You can discuss your product, business or services as much as you want – that’s really what folks are investing in anyway.
• Unless you have a very large retail community (e.g. certain B2C businesses), you should budget for a comprehensive online marketing campaign. We can recommend professional agencies who can build and manage campaigns, but make sure your marketing ads comply with the rules discussed in this section (Texture can help here also).
Frequently Asked Questions
The funding page must include a section of FAQ. The FAQ will depend on the nature of the offering, but you can choose from some of the samples below or create new ones. The FAQ section is typically presented as a list of questions, where the answer can be expanded by clicking on the relevant question.
Sample questions:
‣ Will CompanyA distribute profits or dividends?
‣ Will I be able to trade my shares in CompanyA on the secondary market
‣ Who are the competitors of CompanyA?
‣ Why is this a good time to invest in CompanyA’s sector?
‣ What are the risks to my investment?
Texture FAQ:
Texture requires the following FAQ to be included:
What is Reg CF?
Reg CF or Regulation Crowdfunding, allows companies to offer and sell up to $5 million of their securities without having to register the offering with the SEC. Crowdfunding refers to a financing method in which money is raised through soliciting relatively small individual investments or contributions from a large number of people. With Regulation Crowdfunding, the general public now has the opportunity to participate in the early capital raising activities of start-up and early-stage businesses.
Can I invest in a Reg CF offering?
Anyone can invest in a Regulation Crowdfunding offering. Because of the risks involved with this type of investing, however, you are limited in how much you can invest during any 12-month period in these transactions. The limitation on how much you can invest depends on your net worth and annual income.
What are my investment limits?
If you are a non-accredited investor, then the limitation on how much you can invest depends on your net worth and annual income. If either your annual income or your net worth is less than $124,000, then during any 12-month period, you can invest up to the greater of either $2,500 or 5% of the greater of your annual income or net worth. If both your annual income and your net worth are equal to or more than $124,000, then during any 12-month period, you can invest up to 10% of annual income or net worth, whichever is greater, but not to exceed $124,000.
What is an accredited investor?
An individual will be considered an accredited investor if he or she:
• earned income that exceeded $200,000 (or $300,000 together with a spouse or spousal equivalent) in each of the prior two years, and reasonably expects the same for the current year.
• has a net worth over $1 million, either alone or together with a spouse or spousal equivalent (excluding the value of the person’s primary residence and any loans secured by the residence (up to the value of the residence)), OR
• holds certain professional certifications, designations or credentials in good standing, including a Series 7, 65 or 82 license.
Who is Texture Capital?
Texture Capital Inc. is a FINRA Member broker dealer engaged by the issuer to act as onboarding agent for this offering. We will conduct ‘Know Your Customer’ ‘Identification’ and ‘Anti Money Laundering checks on all investors. In addition we have conducted due diligence on the issuer to ensure they are a registered business in good standing, and that the principals are not considered Bad Actors. While we have conducted certain due diligence, our participation does not represent an offer or solicitation to buy the securities. Texture Capital does not make recommendations regarding asset allocation, investment strategy or with respect to purchase or sale of any specific securities. To help you better understand Texture Capital’s services please consult our Form CRS (Customer Relationship Summary), which may can be found at www.texture.capital/crs
What are the risks associated with this offering?
Crowdfunding securities offerings are not registered with the SEC and are considered highly speculative. For a full discussion of the Risk Factors please refer to the Offering Memorandum / Form C.
Where can I direct additional questions about the investment application and process?
For questions about the investment application and process please contact onboarding@texture.capital or call +1 646 979 8558 and select option 9.
I have some questions about the offering. How do I communicate with the Issuer?
Prospective investors with questions about the company or its product or the offering should submit their questions in the Discussion section of the investment website. This is a public forum where valid questions will be displayed for all to view, with responses clearly tagged with who the response is from.
Disclosures
Texture requires the following disclosure text to be included on the funding page, this can be at placed at the bottom of the page:
This offering under Regulation Crowdfunding is being conducted through Texture Capital Inc. (“Texture”), a FINRA member broker-dealer. You can review the background of our broker-dealer and our investment professionals on FINRA’s BrokerCheck here. Texture Capital Inc. is a member of SIPC and explanatory brochures are available upon request by contacting SIPC at (202) 371-8300.Texture is the Onboarding Agent for this offering and is not an affiliate of nor connected with the Issuer. Texture is NOT placing or selling these securities on behalf of the Issuer. Texture is NOT soliciting this investment nor making any recommendations by collecting, reviewing, and processing your application for investment. Texture conducts Anti-Money Laundering, Identity, and Bad Actor Disqualification reviews of the Issuer and ensures they are a registered business in good standing. Texture should NOT be relied upon to have validated or approved the information provided by the Issuer or the Issuer itself. Texture may direct applicants to specific sections of the Form C to locate information or answers to their inquiry but does not opine or provide guidance on Issuer-related matters. For more information about Regulation CF, please review our Reg CF Education Materials. Our compensation disclosure can be found here: Texture Capital Compensation Disclosure.