Intro to Angel Investing | Lecture #3 | Form C's & "Testing The Waters" - Taught by Garry Johnson III
Startup companies that launch campaigns on various investment platforms are also regulated by the SEC, and must remain compliant if they hope to successfully raise money from Non-Accredited Investors. These businesses must file what's called a Form C with the SEC, which makes the fundraise a public offering of securities (via equity or debt)— it's like a mini IPO.
Each company has to put the legal paperwork together to offer a deal with specific investment terms, and the SEC has guidelines on what communications the startup can have as they publicly raise funds from private-market investors. This is important because the SEC wants to ensure there are no bad actors seeking to defraud investors, whether you’re “sophisticated” or not.