Investors Knowledge Base

Information the Startup (Issuer) Will Disclose – Before You Invest

Before you invest, the Issuer must provide you with extensive information on a Form C (more ) , which will be available on our site. The information includes:

  • The Issuer’s name, address and website
  • The Issuer’s directors and officers
  • The principal occupation and employment for the last three years of each director and officer
  • The names of each person owning 20% or more of the Issuer’s voting securities
  • The risk factors associated with the investment
  • The Issuer’s business and business plan
  • How the proceeds of the offering will be used
  • The Issuer’s ownership and capital structure
  • A description of how rights exercised by the principals of the Issuer could affect Investors
  • The compensation paid to us in the offering
  • A description of previous offerings by the Issuer
  • Whether the Issuer has previously failed to file the reports required by law
  • Transactions with officers, directors and other “insiders”
  • Whether the Issuer would be disqualified from offering securities under Title III under the “bad actor” rules, if the effective date of those rules were different
  • A discussion of the Issuer’s financial condition
  • How the Issuer will deal with over-subscriptions
  • Where on the Issuer's website it will post annual reports, and when the annual reports will be available
  • Financial information about the Issuer, as described below
  • Any other information necessary in order to make the statements made, in light of the circumstances in which they were made, not misleading

What types of financial information an Issuer must provide depends on three things:

  1. How much money the Issuer is trying to raise in the current offering;
  2. Whether this is the Issuer’s first offering using Title III; and
  3. If this is not the Issuer’s first offering using Title III, how much the Issuer has raised in other Title III offerings during the last 12 months.

Where the amount of the Title III offering, together with all other Title III offerings of the same Issuer within the last 12 months, is:

The Issuer must provide:

$107,000 or less

The Issuer’s total income, tax income, and total tax, as reported on the Issuer’s Federal tax return, certified by the principal executive officer of the Issuer; and financial statements of the Issuer, certified by the principal executive officer of the Issuer. If financial statements are available that have been reviewed or audited by a public accountant that is independent of the Issuer, then those financial statement will be used instead.

More than $107,000,
but less than $535,000

Financial statements that have been reviewed by a public accountant that is independent of the Issuer, but If financial statements are available that have been audited by a public accountant that is independent of the Issuer, then those financial statement will be used instead.

More than $535,000

If this is the Issuer’s first Title III offering, financial statements that have been reviewed by a public accountant that is independent of the Issuer. If this is not the Issuer’s first Title III offering, financial statements that have been audited by a public accountant that is independent of the Issuer.

All financial statements must be prepared in accordance with U.S. “generally accepted accounting principles.”  Financial statement reviews must be conducted in accordance with the Statements on Standards for Accounting and Review Services issued by the Accounting and Review Services Committee of the AICPA.  Financial statement audits must be conducted in accordance with either (i) auditing standards of the AICPA, or (ii) the standards of the Public Company Accounting Oversight Board.