Resources For Business Owners

The Basics

What is crowdfunding?
Crowdfunding typically refers to the use of the Internet to raise capital from a large number of investors. Under SEC rules (Title III of the JOBS Act), the general public may participate in capital-raise campaigns by startups and early stage companies.
How is this legal?
In 2012, the JOBS Act passed, which allowed businesses to raise capital online, outside of the traditional avenues. A few years later, on May 16th, 2016, an amendment dubbed Title III was passed allowing non-accredited (net worth < $1,000,000 & annual income < $200,000 for two years, or < $300,000 with a spouse), everyday people can now invest in private companies. Cool, huh?
What is Title III of the JOBS act?
The Jumpstart Our Business Startups Act (JOBS Act) was established on April 5, 2012 to encourage investment in small privately owned businesses. The JOBS Act ranges from Title I-VI. Title III allows businesses the opportunity to sell securities to both unaccredited and accredited investors (anyone!). It was enacted May 16, 2016 and is overseen by Financial Industry Regulatory Authority (FINRA). Broker-dealers and funding portals like Nvsted that are registered with both the SEC and FINRA are permitted to offer and sell securities on behalf of companies to the public.
What are the advantages of crowdfunding?
Traditional business loans are not an option for everyone. Crowdfunding offers a unique opportunity to gain valuable feedback and create exposure for your business through the promotion of your campaign, all while you raise the funds you need to achieve your goal. Investors are often your best customers and most passionate ambassadors. Let the crowd work for you.
What are the drawbacks to raising money through crowdfunding?
Launching a crowdfunding campaign is time consuming. There are upfront fees and a lot of paperwork involved with no guarantee of a successful raise. Once your campaign is live, you can expect to spend a lot of time marketing and promoting your campaign. Make no mistake, managing a crowdfunding campaign is hard work, but the potential reward is worth it.
Why raise funds from the crowd?
Investors are often your best customers and most passionate ambassadors. Raise money from the crowd and amplify that support hundred fold. A crowd of investors can help connect, source information, and provide feedback on your product in ways more traditional investors can’t. Let the crowd work for you.
What is Nvsted?
Nvsted is a St. Louis-centric crowdfunding marketplace that brings innovators and capital resources together. Nvsted provides a platform for startups and early stage companies to reach both accredited and non-accredited investors for their fundraising needs. It’s a viable complement or alternative to capital-raise scenarios such as bootstrapping, friends & family, and angel investors with a hyper-local focus. You have a growing business. Let Nvsted help you get to the next level.
Why was Nvsted created?
Nvsted’s hometown, St. Louis, MO, has grown into a thriving hub of startup activity. Just ask any entrepreneur, startup, or business publication. St. Louis is home to several dedicated innovation communities supported by a wealth of accelerators, angel networks, co-working spaces, and a collaborative drive to reinvent our City for the future. So, let’s just say, the Nvsted team was primed to make something of its own to further support our City’s thriving business community. As our startup community ages and market conditions mature, most traditional early-stage investors are choosing to delay their involvement further down a startup’s development spectrum with fewer investments across the board. Furthermore, traditional sources of early-stage private funding only seem to find its way to a small share of the total business community, and banks are only getting more conservative. There’s a growing need more than ever to help fill the funding gap that exists between the accelerator and angel investor stage to the venture capital firms of the world. Enter Regulation Crowdfunding and the Nvsted platform. We listened to our business community and developed a platform to serve a segment of their fundraising needs. While some regulations continue to hold back Reg CF, we believe Nvsted will be pivotal to jumpstarting local startups’ and early stage companies’ funding in the St. Louis market. Join the momentum and help build our community, one crowdfunded business at a time.
What makes Nvsted different from other crowdfunding portals?
Nvsted is the only Regulation Crowdfunding marketplace with a hyper-local focus, where the investment impact will primarily resonate within the St. Louis, MO region. Even better, Nvsted’s low-cost fee structure puts more cash in the pockets of the local businesses raising money through Nvsted that need it most. Don’t confuse us with Kickstarter and other reward- or perk-based crowdfunding sites. Nvsted is a marketplace to offer real securities (e.g. debt or equity) to everyday investors wanting to get in on the action and support the small and early stage business communities with the added perk of a potential return. This is your opportunity to turn customers and everyday people into investors that will fuel your business for what’s next. We’re a startup ourselves and have the passion and drive to make Nvsted a leading online Regulation Crowdfunding investment portal for companies in our region. We’ve been in your shoes. We understand that founders are incredibly busy, wearing multiple hats, grinding day-in and day-out to grow their businesses. We took the guesswork out of where you’ll find your next investor and built a platform to help you reach that audience. Now we need your help. Let’s grow our businesses together.
What type of businesses may use Nvsted to raise capital?
Nearly all types of U.S. Missouri-based for-profit corporations or LLCs are eligible, such as restaurants, software firms, biotech, plant-science, healthcare, breweries, and distilleries. Whether you’re brick and mortar or taking on the tech world, let’s talk. We will not support marijuana, gambling, adult entertainment, investment companies, banks or other financial institutions.
Are not-for-profits eligible?
No. At this time, Nvsted is a Reg CF marketplace (i.e. “funding portal”) specifically supporting for-profit entities.
Does my business have to be based in St Louis?
Yes and no. Your company does not need to be incorporated/organized in the State of Missouri so long as the company is properly qualified to transact business within the State and you are doing the majority of your business within the State.
How much does it cost to launch my campaign on Nvsted?
The barrier to entry for startups and early stage companies to leverage Nvsted’s platform is low. It’s free to create a profile and start dreaming about your company’s future by building out a mock campaign. When you decide it’s time to go for it, the cost to launch is approximately $2,200 to $2,500 with 100% of the funds going to third party vendors for items such as background checks, escrow account setup, and filing your Form C with the SEC to make your raise official. These steps are required to go live. No way around it. Before the raise:
  • $1,500 - Form C access and submission via iDisclose, our partner that provides a simplified way to complete and submit this required form
  • $500 - Escrow setup through PrimeTrust/FundAmerica
  • $45/each - Background checks on the business and its primary officers (min of two checks, or $90)
  • $25 - First month’s escrow maintenance fee (Nvsted absorbs the $25 fees monthly until offer closes)
  • As needed – Accounting services to provide U.S. GAAP-compliant financial statements, and an official review if necessary
  • As needed – Legal services to provide a review of the Form C and any other necessary advice
After a successful raise:
  • 1% of the total amount of funds raised - FundAmerica charges a concession fee for cash management services provided during your active fundraising campaign
  • 5% of the total amount of funds raised - Nvsted’s concession fee for hosting a successful raise on the platform (see below for more details)
Do I have to provide my company’s financial statements?
Yes. When your company participates in a Regulation Crowdfunding raise, you must provide the company’s most recent financial statements. The level of scrutiny (and in turn, cost) associated with this process depends on the amount your company is seeking to raise:
  • ≤ $107,000: Financial statements and specific line items from income tax returns, both of which are certified by the principal executive officer of the company.
  • $107,000.01 to $535,000: Financial statements reviewed by an independent public accountant and the accountant's review report. If audited statements are available, those must be provided.
  • $535,000.01 to $1,070,000: For an issuer using crowdfunding for the first time, financial statements reviewed by an independent public accountant and the accountant's review report. If audited statements are available, those must be provided.
No matter the amount raised, all companies conducting an offering through Nvsted must provide financial statements in U.S. GAAP (Generally Accepted Accounting Principles) format, which includes the following:
  • Balance Sheet
  • Income Statements
  • Statement of Cash Flows
  • Statement of Stockholder’s Equity
  • Notes, which explain accounting policies used and any material changes during and after the period covered by the financial statements
How many years of financial statements do I need to provide?
The general rule of thumb is that you will need to provide the lesser of the following:
  • The two most recently completed fiscal years
  • The period since the company’s inception
If your company is within 120 days of the end of its most recent fiscal year, you may provide the prior year’s statements. For example, if your company’s fiscal year ends on December 31st, and you begin your Nvsted raise in April 2018, you will only need to provide your company’s 2016 financial statements until your 2017 statements are available. See Legal Primer for more details.
How does Nvsted make money?
Nvsted is only successful if you’re successful. Success for you is raising enough funds to hit your minimum target. Once you’ve hit your target, directed Nvsted to close the raise, and all investor funds have cleared via ACH, Nvsted then earns a concession fee of 5% of your total raised amount. The Nvsted fee is for servicing your raise through our platform, and is taken out of the total funds you’ve raised in escrow. You, as issuer, do not need to come up with additional money above and beyond your raised funds. The escrow amount net of Nvsted’s fee will then be disbursed to your company’s account for use as outlined in your raise.
Does Nvsted acquire an equity stake in my business?
No, unlike some other crowdfunding sites, Nvsted does not take an ownership position in your business, or any stake in the securities you’re offering. Our goal is to provide a marketplace for you to promote your idea or business to potential investors.
I want to raise funds with Nvsted. How do I begin?
You’ll need to gather a variety of documents that range from business plans to financial statements to complete the 3 main steps of launching a campaign.
  • Building your Company Profile and Campaign
  • Completing and submitting the Form C and supporting documents to the SEC’s EDGAR database
  • Setting up an escrow account
What do I need to build my company profile and campaign?
  • Company name, tagline and location
  • Key Facts about your company
  • Company website link
  • Social media links
  • Leadership and employee pictures & bios
  • Risk statements
  • Photos, videos and words to tell your story and promote your investment opportunity
  • PDF’s of any documents you want to share to support your campaign
  • Frequently asked questions and your answers to them
What will I need to fill out the Form C?
  • Basic information about your company
  • Key staff biographies and work experience
  • Description of the business
  • Securities and offering details
  • Company financial condition
  • Current ownership and capitalizations
  • Transactions with related persons and conflicts of interest
  • Risk Factors the company faces
  • Other Material Information
What do I need to do to get ready to create my offering and escrow account?
  • Company name, contact and addresses
  • Funding goals and timeframe
  • Offer name, security type and details
  • Appropriate financial statements (see here for more information)
  • Copy of Form C, reviewed by an attorney and submitted to the SEC
  • Leadership information for Bad Actor Check
  • Subscription Agreement
What contracts do I have to sign before I can start raising funds?
You do not have to sign any contracts with Nvsted, but you will be provided a checklist which you will need to complete and sign prior to starting your raise. In addition to this, you will have to fill out some paperwork for our partner, FundAmerica, who provides escrow account services. FundAmerica will need your company to review and sign an escrow account agreement and a technology agreement. You and your trusted advisors or lawyers will need to review and sign these agreements prior to beginning a raise on Nvsted.

Pre-Campaign

When am I ready to start fundraising on Nvsted?
If you have a for-profit business, a vision, and a plan for success, let’s talk. Nvsted can help facilitate the capital raise you need to get your business to the next level. Nvsted focuses on startups and early stage companies, but can work with companies at any stage of the game. Businesses with a proof of concept, a working prototype or existing product/service line, investors, endorsements, and/or an existing customer base will be primed for Nvsted. If you don’t hit all the marks, that’s okay. Let’s chat and see if Regulation Crowdfunding is right for you.
What is the difference between a debt and equity investment?
A debt investment offering is usually used when a company does not want to give up shares of ownership and also has existing cash flow to be able to make payments on their debt. An equity investment entails issuing additional shares of the company to investors in exchange for cash, with the hope that the company will continue to grow.
What are some examples of the types of securities I can use to raise money through Nvsted?
There are a few options for raising capital on Nvsted. Following are educational examples.
  • Promissory Note
    • If you’re unwilling to give up any ownership in your business, and are already cash flowing, a simple promissory note is a great option.
  • Membership Interest
    • Membership units are a great way to raise equity-like financing for an LLC, but do come with some pass-thru taxation that warrants additional review by potential investors. This concept is similar to stock in that members own a percentage or unit of an LLC company where pricing is based on its pre/post-valuation. Membership units may or may not have voting rights, and are subject to taxation on their respective share of the LLC’s profits. From a liability standpoint members of an LLC are generally not personally liable for debts and/or court judgements incurred by the LLC.
  • Equity Shares
    • If you’re a C-Corp or LLC willing to give up a piece of your pie and know what you’re worth, issuing preferred/common stock or membership units is worth exploring. Most often these equity securities are structured as “non voting” or “limited voting” interests so as not to over burden the offering company.
  • Convertible Notes
    • If you’re cash flowing and able to service interest payments now, but are unsure if you’ll be able to repay a large principal payment in the future and aren’t opposed to having some fellow owners, a convertible note is worth exploring. Convertible notes allow an issuer to convert principal investment upfront into equity stake in the future, while giving investors a marginal return along the way.
  • SAFE (Simple Agreement for Future Equity)
    • If you’re a C-Corp looking to raise equity, a SAFE is a streamlined option. Unlike convertible notes, SAFEs are not debt and do not have a specified maturity and execute upon a future equity raise. For a more detailed discussion as to what a SAFE is and how it works we recommend visiting Y Combinator at www.ycombinator.com/documents/
What type of security should I choose to raise the capital I need?
This is a question only you and your trusted financial advisor may answer. Nvsted will not provide direction as to the type of security you offer, though we may provide generic examples for educational purposes.
How do I value my company and set the terms of my offering?
Again, this is something only you and your trusted advisors may answer. Nvsted will not provide direction as to how you should value your company or set the terms of your offering. We suggest leveraging your network of advisors, accountants, lawyers, and professional investors to help guide you here.
Do you group all investors into one shareholder?
No. Regulation Crowdfunding rules do not yet allow for the grouping of multiple equity investors into one shareholder entity on your cap table. So, unfortunately, for now you’ll have a crowded investor base. As the industry matures, this may change. In the meantime, you can designate a lead investor in your equity raise that will act on behalf of all other shareholders within that security round. That doesn’t solve the problem visually, but operationally it expedites approval on major business decisions down the road.
Do all those investors have voting rights?
Short answer. It’s really up to you how you structure your offering. Long answer. We suggest you avoid giving voting rights to all of your minority shareholders. When you need to raise a future round of equity, you’ll need to track down every investor from your 100+ long capital stack for approval. That’s a lot of work, and can sometimes kill a deal. To avoid this scenario, we suggest to the extent you do give voting rights (or voting rights are otherwise allocated by applicable law) that you designate a lead investor, where one reputable investor acts on behalf of all the other investors within the same security round. Be smart though. If you choose to designate a lead investor, it should be someone who is reputable and knowledgeable within your company, your industry, the startup community, investment world, and so forth. You’ll need to prove to everyone else why this person is making decisions on their behalf. Often times, lead investors are also accredited investors who have been through this rodeo before.
How does the investment process work?
After a potential investor has viewed your campaign, completed some due diligence, and is ready to support your cause, they will review their personal and banking information, select their investment contribution and electronically sign your predetermined subscription agreement. That capital contribution will then transfer to your campaign’s dedicated escrow account, which will hold all investor contributions until your campaign is successfully closed or otherwise terminated (see How is my campaign closed?). In any event, funds will need to clear at the escrow level before moving onto the next destination.
How & Where should I set my fundraising target?
With Regulation Crowdfunding, you must hit your minimum target (as well as satisfy certain other conditions, see How is my campaign closed?) in order to draw down and utilize any funds raised during your campaign. On the flipside, you are allowed to accept investment above and beyond your minimum (i.e. oversubscriptions, subject to a maximum raise limit of $1,070,000 within a 12-month period), which may very well occur if your company/idea is a hit. Beware though – biting off more than you can chew can be detrimental to your company’s future. You shouldn’t take on more investment than your company can support in its current stage. As such, we suggest setting a maximum raise accepted as well, which Nvsted will help facilitate, if you find yourself in that position. We recommend setting your minimum target to a level that will allow you to act on your immediate goals, as you can always initiate a follow-up raise just a month or two down the road, if need be, as long as you’re not above your limit for the year. From there, think about a positive plan B, and outline what you’d put any additional funds towards to take your business to that next level. Your fundraising target should be a realistic and obtainable. We all want to see you reach for the stars, but that’s often times done in many strides. Let investors fund a step along your way. Always remember, transparency is key. Let investors know how you’ll put their money to work.
How much capital can I raise on Nvsted?
The maximum you can raise via crowdfunding platforms in a 12-month period under Reg CF is $1,070,000, either through one raise or aggregate multiple raises on Nvsted or any combination of crowdfunding platforms. That maximum limit includes all transaction fees associated with your raise(s). Aside from that set monetary limit, your raise is ultimately limited by the effort you put into your campaign, including the quality of your offering page and the power and reach of your following. At a minimum, you’ll need to have a goal of $50,000 to participate on Nvsted.
How long are most campaigns?
The typical campaign is active for approximately 180 days.
Are there limits to how much an investor may invest in my company?
Yes. Investors participating in Regulation Crowdfunding are limited in the aggregate amount they can invest over a 12-month period, based on their income and net worth. In general, that amount is between 5-10% of those figures. At a minimum, each investor has the capability to put $2,200 of money to work per year in businesses like yours.
Who can invest?
Any US Citizen or US Person can invest in opportunities on the Nvsted platform.
What happens after my raise is successful?
When your raise reaches at least the minimum amount and the time expires or is closed by you, the raise will no longer accept investments. From there, the final ACH transactions must clear in the Escrow account, and then the total amount will be transferred to your company bank account, less 6% (5% charged by Nvsted and 1% charged by FundAmerica).
What is Nvsted’s review and approval process for campaigns?
Do you think Regulation Crowdfunding may work for you? Great! Once you start the process of building your company profile on our site, we will reach out to you to discuss more in detail and answer any questions you may have. After working with you to determine if Regulation Crowdfunding is a good option for you, the process begins by you completing the information on your Form C through our partner, iDisclose. We will be with you every step of the way, and when the Form C is complete, we will review the information. If your campaign is rejected, that usually means we had incomplete information about your company, we cannot host your type of company (see The Basics for details), or your company is not quite ready to launch a fundraising campaign. In any case, we will provide thorough feedback and work with you to potentially approve your campaign in the future. If your campaign is approved, we will work with you to determine a launch date for your raise to go live to the public and submit the Form C to the SEC. From there, you will need to be sure that you spend time marketing and promoting your campaign, and that you pay diligent attention to investor activity, answering questions and providing updates as needed while your fundraising campaign is active.
What is an AML (Anti-Money Laundering) Check and why does it matter?
AML checks are performed on each investment in your offering, giving you the peace of mind and protection against securities fraud, IRS tax-id fraud, money-laundering, financial crimes, market manipulation and more.
What is a "Bad Actor" check and why do I need it?
A "Bad Actor" check includes a number of screenings to ensure that your business and any officers of your company are not involved in any suspicious activity. Per SEC rules, no company may raise capital if any officer, director, promoter or beneficial owner of 20% or more of its equity is a Bad Actor. This check is required and searches for:
  • Criminal convictions relating to securities transactions, false filings with the SEC or certain securities-related businesses;
  • Court injunctions and restraining orders relating to securities transactions, false SEC filings, securities-related business activities or obtaining money or property through the mail by means of false representations;
  • Final orders of certain financial regulators that bar the covered person from associating with a regulated entity or engaging in certain financial business activities, or that are based on a violation of antifraud rules, or any postal service false representation order;
  • SEC orders revoking the registration of a regulated person, limiting the activities of such a person, or imposing industry, collateral or penny stock bars;
  • SEC cease-and-desist orders with respect to the scienter-based antifraud rules or violations of Section 5;
  • Suspension or expulsion from a self-regulatory organization; and
  • In the case of any registrant, issuer or underwriter named in any registration statement or Regulation A offering statement filed with the SEC, the issuance of a suspension or stop order with respect to such registration statement or offering statement, or any ongoing investigation relating to the same.
I’m confused about macros in the Subscription Agreement. What do they do and what does each macro mean?
Macros are formulas that automate your subscription agreement, pulling in the necessary investor information without allowing them to edit anything else that is there. Each macro is listed below with a definition of what information it pulls into the agreement. SIGNATURES %%SUBSCRIBER_SIGNATURES%% - The investor signatures. In the case of joint signers, signature blocks will appear for all parties. Will display a blank line until the subscriber has signed the agreement. %%ISSUER_SIGNATURE%% - The issuer’s signature. Will display a blank line until the issuer has counter-signed the agreement. Investment %%VESTING_AMOUNT%% - The amount in USD being invested by investor. %%PAR_VALUE%% - The par value of the investment in a debt offering. %%UNIT_COUNT%% - The number of units or shares being purchased. INVESTOR %%SUBSCRIBER_DETAILS%% - The investor’s details in a formatted table including the name, address, phone number, and email address. For joint investors the information for all parties is displayed. %%SUBSCRIBER_DETAILS_WITH_TAX_ID%% - Idenitical to SUBSCRIBER_DETAILS except that investor’s tax ID is also displayed. This should only be used when it is absolutely necessary for compliance purposes as this is sensitive data. %%INVESTOR_TYPE%% - The type of investor (e.g. "Individual", "IRA", or "Trust") %%INVESTOR_ANNUAL_INCOME%% - The investor’s annual income if provided. %%VESTING_AS%% - The investor’s name. %%INVESTOR_NET_WORTH%% - The investor’s net worth if provided. Offering %%DEBT_INTEREST_RATE%% - The interest rate of the security in a debt offering. %%DEBT_MATURITY_DATE%% - The maturity date of the security in a debt offering. %%UNIT_PRICE%% - The price per unit or share. DATE %%DAY%% - The day of the agreement’s creation (e.g. January 1st would be "1"). %%DAY_WITH_ORDINAL%% - The day of the agreement’s creation (e.g. January 1st would be "1st"). %%EXECUTION_TIME_LEGAL%% - A legal formatted date and time when the agreement is was counter-signed by the issuer (e.g. "1st day of January, 2015, at 12:00PM EST"). Until the issuer signs, it will display blank lines in place of the actual date and time information. %%MONTH%% - The month of the agreement’s creation (e.g. January 1st would be "January"). %%NOW%% - The date and time of the agreement’s creation (e.g. "January 1st, 2015 at 12:00PM EST"). %%NOW_SHORT%% - A short version of the date and time of the agreement’s creation (e.g. "01/01/2015 at 12:00PM EST"). %%TODAY%% - A long version of the date of the agreement’s creation (e.g. "January 1st, 2015"). %%TODAY_SHORT%% - A short version of the date of the agreement’s creation (e.g. "01/01/2015"). %%YEAR%% - The year of the agreement’s creation (e.g. January 1st would be "2015"). OTHER %%PAGE_BREAK%% - For a page break at this point in the agreement when printing or generating a PDF.

Building A Profile

How do I create a profile?
Signing up is easy. At the top right corner of the homepage, you’ll have the option to either Login for existing users or Sign Up for new users. We’ll need some basic info, including your full name, email address, and a password for the platform. Standard password security suggestions apply here, but there are no requirements. That’s it. You’re ready to start exploring the site. If you see yourself investing in the future, we’ll need some additional banking information to do so. If you’re looking to raise funds, you’re free to start creating a campaign whenever you’re ready to do so. Nvsted is built out with some great tools to help make your campaign a success, and we’ll be in touch along the way to help you out.
Can I have a profile and not fundraise?
Of course. Nvsted requires any user accessing the platform to create a basic user profile. From there, it’s up to you to decide where you want to take it. We encourage business owners to dream and start editing their potential campaign page for a raise someday, even if they’re not quite ready to go live. Nvsted has all the tools to get you there. We’ll be in touch along the way.
How much does it cost to create a profile?
Creating a user profile with Nvsted is free. All we ask for is some basic information about you and then you’re free to explore the site. If you do end up raising capital, there will be some minimal startup costs to do so, all of which will go to third party providers to setup the escrow account that will house your campaign funds, perform some background checks, and formally file what’s called a Form C with the SEC.
How do I build a good profile?
There are many things that go into a successful campaign, including a great story, strong team, effective product/service, stunning imagery, and a planned path to success. You can read more about setting up your profile here.
Can I promote my profile?
You can promote your profile publicly, but it is not legal to state you are fundraising or have a concrete plan to fundraise in the future, until after you’ve filed a Form C with the SEC to memorialize your raise. We have your back. Check out our Form C Guide for a better understanding of what goes into that SEC filing. You can read more about promoting an active campaign here.

Sorting & Curation

Does Nvsted curate offerings?
No. Other than screening companies for signs of fraud and compliance with applicable laws related to the proposed offering, it is not our role to choose who can fundraise. Nvsted will educate companies on crowdfunding and what it takes for a successful raise, but in the end, it’s not our place to decide who is worthy of investment. That’s for the investors to decide.
How are companies sorted on Nvsted by default?
Company offerings are listed at random, and rearranged at random when a webpage is (re)visited. Nvsted cannot, and will not, show preference to one offering over another; provided that it may, from time to time, highlight certain newly available offerings over older offerings.
Can I pay to be a featured offering on Nvsted?
No, it is both illegal and unethical. Sorry.

Promoting

Are there any legal restrictions when promoting my Reg CF campaign?
You are only allowed to promote your capital campaign after you’ve filed your Form C with the SEC. After that, you can advertise anyway you like – email, social media, events, etc. – as long as your advertisements are limited to certain factual information ONLY (as discussed below). Among other things, you will need to avoid saying subjective statements like “you’re the best thing since sliced bread.” Also, a little birdie told us the SEC doesn’t like it if you say your offer is SEC approved either. Acceptance of your Form C means you provided the required information to go live, it doesn’t mean the SEC endorses your offering. Lastly, when advertising your raise, make sure to include a link to your Nvsted campaign in those messages - it’s the law. Without limiting the above, you will be free to advertise the terms of your offering provided that any promotional materials you choose to use must name Nvsted as the platform through which the campaign is being conducted and must include no more than the following information:
  • A statement that you are conducting an offering through Nvsted, including a link to your Nvsted offering page;
  • A statement of the terms of your offering (limited to the amount, nature, price, and closing date of the securities being offered); and/or
  • Factual information about the legal identity and business location of your company (limited to the legal name of your fund raising company, address, phone number, website, email address of a company representative, and a brief (1-2 sentence) description of the business purpose).
Advertising materials which do not conform to the above are strictly prohibited and could get you into serious hot water with the SEC. Nvsted offers built-in functionality to allow issuers and investors to communicate via the Question and Answer section on the campaign page. There, issuers will be able to respond to questions about the terms of their offerings and/or even challenge or refute statements made by potential investors through this communication channel on the Nvsted platform, so long as the issuer identifies itself as the issuer in all communications (the identification notice is built-in to Nvsted).
What can I say (or not say) to the public outside of Nvsted?
This is where things get sticky. Obviously, if no one knows about your company and its raise, you’re going to have a hard time raising any capital from the crowd. The SEC knows this too and has set certain guidelines for what Issuers can and cannot say while raising capital through Regulation Crowdfunding. In general, you can discuss facts about your business and/or its products/services, provided that you do not mention the actual terms of your raise outside of the Nvsted platform. As such, feel free to mention you have an active raise and then simply direct the interested party to your official campaign page to learn more. One more thing – you’re not allowed to say non-factual and/or subjective things about your business or prospects (i.e. we’re the best coffee shop ever and we’re going to be the next Starbucks). Let’s go through a scenario – A stranger comes into your coffee shop and strikes up a conversation about your business while you brew his/her coffee. This stranger loves your business and is an avid customer looking for a way to get involved, potentially by investing. You have an active raise on Nvsted. How do you respond? Feel free to chat about things related to your ordinary course of business – how things have been going for the shop, new products this month, any upcoming events, etc. – and, if it comes up, the fact that you have an active raise on Nvsted, just make sure the conversation on the raise stops there. At that point, you must direct the potential investor to the Nvsted site to learn more about the terms of offering and to make an official investment. Be cognizant of the media and/or venue you are promoting through. Depending on what you choose, there may be additional limitations on mentioning your sale of Reg CF securities. In general though, if you remain factual, and don’t disclose terms, you should be good to go.
What’s my part?
Nvsted has set the foundation for a successful Regulation Crowdfunding marketplace, where innovators and capital resources meet. That being said, your success ultimately hinges primarily upon YOUR marketing efforts, network, and general willingness to succeed. Your web of family, friends, advisors, customers, and local community residents will be your most vital ambassadors, helping spread the word of your mission and capital campaign. Those closest to what you do will be your proof of concept for those potential investors that are unfamiliar with your business and/or are located outside of the St. Louis footprint. So, while Nvsted will have the attention of a national investor base, how much effort you put into marketing your raise will really define the success or failure of your capital campaign. The most successful raises are those with companies that have an extensive following already and deep investor commitment before even going live. Furthermore, creating momentum in the very beginning is key to attracting random investors to your cause, as they won’t want to miss out on the next great thing. If you don’t have a deep network of support just yet, don’t worry. Nvsted will help bridge that gap by showcasing your company and its offering on the national stage. You better believe Nvsted will be marketing itself as a Reg CF marketplace, just not your offer in particular. We can’t show any preferential treatment in that respect. We’ll help drive traffic to the Nvsted platform, and we ask the same of you too.

During The Campaign

Am I allowed to close my offering before my stated deadline?
Yes, you will be able to close your offering before your stated deadline if, and only if:
  1. you have reached your target offering amount;
  2. your offering has been open for at least 21 days;
  3. You reach out to the Nvsted team and coordinate an email communication advising all committed and potential investors:
    • of the new closing deadline (which needs to be no sooner than 5 business days from the date of the notice);
    • that they will have the right to cancel their investment commitments( for any reason) until 48 hours prior to the new closing deadline; and
    • whether or not you will continue to accept investment commitments during the 48-hour period prior to the new closing deadline; and
  4. taking into account any cancellations that have occurred, you continue to meet (or exceed) your target offering amount as of the new closing deadline
What happens if a material change occurs?
If there is a material change in your business during an active raise, you must disclose that information to investors before you’re able to close out the round. You will not want to deceive investors. Following disclosure, investors must then reconfirm they are still on board given the new information. A material event should be looked at as anything that could reasonably be believed to change an investor’s mind as to whether they want to invest, such as losing a key team member/contract/customer, or a positive event like receiving some unanticipated outside funding.
What happens if I do not reach my target offering amount before my stated deadline?
If you are unable to obtain enough investment commitments to meet your target offering amount as of your stated deadline, we will unfortunately need to shut down the offering, notify any current committed investors of such cancellation (and the reasons for such cancellation) and refund all amounts then held in escrow. You may launch another campaign as soon as you are ready. Be sure to take some time to work through any feedback and secure more followers.
Can I extend my funding deadline?
You, the Issuer, do have the ability to extend your campaign by filing an amendment to your Form C with the SEC. This is appropriate, in some cases, when failure is the only other option, but it comes with some risk. An amendment to your raise is considered a material change. You must disclose this information to your investor pool and each investor will be required to review and recommit their investment. There is a chance that you could lose investors this way.
How do I communicate with investors during my raise?
We provide the tools to allow you to communicate with investors during your raise. Your Company Page will have a “Question and Answer” section that may be updated by you at any time, even while the raise is active. This section also allows investors to ask you any questions they might be curious about concerning your company and its raise, such as “How did you determine your company valuation?” or “What are your projected sales for next year?”. These questions and your answers to them will be posted publicly for all to see, so make sure you answer them promptly and thoroughly, even if they have been asked before.
How long does it take to get the money?
Once you’ve reached your campaign target, directed Nvsted to close it (see How is my campaign closed?), and the escrow agent is informed to disburse funds, there is still a short period of time for all the investment contributions to fully clear via ACH transaction at the escrow level. ACH generally clears within 3-5 days, but it can take longer.
Can an investor cancel their investment after the offering is closed?
Yes. Federal regulations require that you return an investment if an investor cancels it after the offer closes. Transactions must clear in a manner similar to checks, and Federal regulations provide investors with 60 days to recall funds. For risk reduction and protection, the Escrow Agent will agree to release, starting 10 calendar days after receipt and so long as the offering is closed, the greater of 94% of funds or gross funds less ACH deposits still at risk of recall. Of course, regardless of this operating policy, the Issuer remains liable to immediately and without protestation or delay return to PrimeTrust any funds recalled pursuant to Federal regulations.

Post-Campaign

My campaign was a success, how do I close it and receive my funds?
Once you’ve met your campaign target and the other requirements necessary to close your campaign (see How is my campaign closed?), you’ll need to contact an Nvsted representative to officially close out your raise. There are a few quick steps we need to complete on our end to make it official on the portal. This process should be handled within the business day received. The official close of your raise on the portal will prompt the escrow agent to ready the disbursements once all investment contributions have cleared at the escrow level. From there, the funds will be sent to you via ACH transaction, which may take 3-5 business days.
How is my campaign closed?
In order to close your campaign on the original deadline presented in your campaign materials, as of such deadline you will need to have met your campaign target AND your campaign will need to have been open for at least 21 days. It is also possible to adjust the closing deadline presented in your campaign materials (i.e. to make it sooner or later). However, should you choose to do so, each of those people who have already committed to your campaign will need to be notified of (and at least 5 days prior to) the new deadline and will be permitted to cancel their investment commitments up to 48 hours prior to the new closing deadline. Further, in order to close your campaign as of the new deadline, you will still need to have met your campaign target AND your campaign will still need to have been open for at least 21 days. Assuming you have met the above qualifications, Nvsted will inform the escrow agent to disburse funds to you as of the applicable deadline. If for whatever reason, your campaign is not successful and you are not able to satisfy one or more of the above qualifications, Nvsted will automatically terminate your campaign as of the applicable deadline and inform the escrow agent to return any funds raised back to the appropriate investors.
What happens if a material change occurs?
If there is a material change in your business during an active raise, you must disclose that information to investors before you’re able to close out the round. You will not want to deceive investors. Following disclosure, investors must then reconfirm they are still onboard given the new information. A material event should be looked at as anything that could reasonably be believed to change an investor’s mind as to whether they want to invest such as losing a key team member/contract/customer or some anticipated outside funding.
What happens if I do not reach my target offering amount before my stated deadline?
If you are unable to obtain enough investment commitments to meet your target offering amount as of your stated deadline, we will unfortunately need to shut down the offering, notify any current committed investors of such cancellation (and the reasons for such cancellation) and refund all amounts then held in escrow. You may launch another campaign within 30-days. Use that time to work through any feedback and secure more followers.
Can I extend my funding deadline?
Yes. Issuers have the ability to extend their campaigns by filing an amendment to their Form C with the SEC. Under certain circumstances, it would be appropriate to do so, especially if the only other option is failing, but there are also risks involved. First and foremost, an amendment to your raise is considered a material event, which will require reconfirmation from each existing investor. Investors who are ready to put their money to work now may not be willing to wait around any longer to see if you’ll actually hit your target to close out the round.
How long does it take to get the money?
Once you’re campaign is successfully closed (see How is my campaign closed?) and Nvsted has informed the escrow agent to disburse funds, there’s still a short period of time for all of the investment contributions to fully clear at the escrow level. Nvsted operates via ACH only, which can take several days to process. Generally, ACH clears within 3-5 business days, but can take longer. While ACH is not instantaneous, it keeps the costs down, putting more money in your business’ pocket at the end of the raise.
Will investors contact me directly?
Yes and No. While your raise is active, we will not provide your direct contact information to investors. During an active raise, all communication between issuer and investor is handled through the Nvsted platform. Most often that communication will be through the Q&A section of your campaign page. Post-raise, you will need to provide Nvsted with a company contact that we will provide to investors should they have follow-up questions regarding their investment. Once your offering is closed, Nvsted will provide you with the contact information of all accepted investors and you will be solely responsible for handling all optional and required post-close communications with your investors (including the delivery of financial statements, the making of payments etc.).
How do I update investors?
While your raise is active, Nvsted has you covered. Issuers are able to update investors through our platform via the Q&A section of your campaign. Post-raise, it’ll be up to you to decide how you continue communication with your investor base. At the very minimum, you’ll communicate through an annual report filed with the SEC.
How often should I provide investor updates?
It’s up to you, but at a minimum, it’ll be annually through a report filed with the SEC highlighting your activity and performance for the year. Every business is different, each requiring different levels of detail and frequency of disclosure. At the end of the day, you need to operate your business well if any investor is going to see some return. So, do what you’re able to manage while keeping your investor base happy and in the loop.
What kind of information do I need to provide the investors during and after the raise?
During a raise, the SEC requires periodic fundraising progress updates via a Form C-U, and if any amendments are made, that’s disclosed via a Form C. Following a successful raise, founders are required to submit annual reports to the SEC for an operational update, including financial statements self-certified by the appropriate officer (no review or audit required). If Founders decide to neglect this requirement, they will be barred from utilizing Reg CF in the future until any past due reports are furnished. The good news is the annual report requirement terminates after 3 years if the company has less than $10MM in assets, or after 1 year if there are fewer than 300 shareholders (provided, however the company may need to file certain documents with the SEC to terminate those ongoing obligations).
How do I submit the Form C-U to the SEC?
iDisclose, our partner who helps you to submit your initial Form C, allows you to submit any Form C-U updates at no additional cost.
Do I need to file an annual report?
Yes. As an issuer utilizing Regulation Crowdfunding, you’ll need to submit an annual report to the SEC with your company’s financial statements and a discussion of your activities for the year within 90 days following your company’s fiscal year end. You must file an annual report for any prior regulation crowdfunding raise before you’re able to activate a new raise in the future. Investors will have access to this report as well. The average cost to file with assistance from a third party provider is $500. Keep in mind, you will not need to file a Reg CF annual report if your company (i) files for an IPO to go public (you’ve made it – you’ll be under a whole new set of regulations here), (ii) is acquired, (iii) repurchases all associated crowdfunded securities, (iv) has fewer than 300 shareholders after Year 1 post-raise, (v) files for bankruptcy, or (vi) has less than $10MM in assets after Year 3 post-raise; provided, however you may need to file certain documents with the SEC to terminate those ongoing obligations. That being said, it is highly recommended that you try to at least communicate with your investors (and provide them with some form of financial reports) no less than annually to keep them in the loop even if you are no longer required to under Reg CF.
Can I use Nvsted after my raise?
No. While Nvsted may continue to show your closed campaign page on the site, your respective offering page will no longer be active for use. In particular, you will no longer be able to communicate with your investors through your campaign page after the offering is closed. Once your offering is closed, Nvsted will provide you with the contact information of all accepted investors and you will be solely responsible for handling all optional and required post-close communications with your investors (including the delivery of financial statements, the making of payments etc.).