SEC Guidance on Using Twitter in a Regulation A+ Offering

Regulation A+ is of great interest right now to a lot of people because of the excitement around equity crowdfunding in general.

Regulation A+ Is Not for the Faint of Heart

An example: Bloomberg ran a story today on using Twitter to “test the waters” in a Regulation A+ offering.

In case you are wondering where you can find this guidance, you can find it here.

And here is the guidance quoted in full:

Question 182.09

Question: Can an issuer solicit interest (or “test the waters”) in a Regulation A offering on a platform that limits the number of characters or amount of text that can be included, thereby preventing the inclusion in such communication of the information required by Rule 255?

Answer: Yes. The staff will not object to the use of an active hyperlink to satisfy the requirements of Rule 255 in the following limited circumstances:

  • The electronic communication is distributed through a platform that has technological limitations on the number of characters or amount of text that may be included in the communication;
  • Including the required statements in their entirety, together with the other information, would cause the communication to exceed the limit on the number of characters or amount of text; and
  • The communication contains an active hyperlink to the required statements that otherwise satisfy Rule 255 and, where possible, prominently conveys, through introductory language or otherwise, that important or required information is provided through the hyperlink.

Where an electronic communication is capable of including the entirety of the required statements, along with the other information, without exceeding the applicable limit on number of characters or amount of text, the use of a hyperlink to the required statements would be inappropriate. [June 23, 2015]


Why You Shouldn’t Try This At Home

The securities laws are complex and difficult, and it is easy to read about the JOBS Act and innovations in finance brought about by the JOBS Act and think you can do things like Tweet about your private company’s financing.

Please hit the pause button in these instances. Remember the above guidance is only applicable to Regulation A offerings. Your 506(b) offering? These rules don’t apply.

Have fun, and be careful out there.

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