Campaign Page Compliance Guidelines

Content Compliance Guidelines

In order to ensure we can do this effectively, we’ve put together a list of guidelines to keep in mind when drafting marketing content for companies. Information from Company’s Pitch Decks must also follow the following guidelines.

For all companies:

Avoid statements that compare the Company with well-known Major Companies. Certain comparison of the company’s services with well-known major companies may be allowed.
1. Impermissible: “[We are or going to be] the Shake Shack of Mexican Cuisine”
  1. Rationale: these startups barely have any operation history whereas the major company is often publicly listed, huge portfolio of investments, etc.
2. Permissible (though limited and discouraged): “Our delivery services are as convenient as Uber.”
  1. Rationale: the statement describes the company’s actual services, not projected services (i.e. company actually has an app and can order on the app) and is not comparing the value of the company with Uber.
Keep exaggerations about product claims to a minimum. While we want to provide content that is engaging, we also need to be sure to keep exaggerated claims to a minimum. Any product or service related claims should be fact-based, since misleading statements are non-compliant under SEC regulation. Examples of such superlatives and absolutes that should be avoided include:
1. Best
2. First
3. Only
4. Most
5. Amazing
6. Extraordinary
7. Monumental
8. One of a kind
Any statistics, facts, and graphs need to include a source. These statements must Include hyperlinks to articles, websites, or journals hosted by third parties that support the particular statistics, fact, or graph. The common examples are: (1) statements about the industry size, (2) images/graphs that show a growing demand for the type of product that the company offers.
1. Third party sources can include Wikipedia, but should not include any articles, websites, journals, or research published by the Company itself.
Any statements of material claim about the Company, its product/service, or management team accomplishment must be supported by proof. Material claims often include discussion of business dealings of particular well known brands, specifically mentioning well known state/federal government agencies, and the management team’s past accomplishments.. Common examples:
1. Company has partnered with XYZ (name of a well known company).
  1. Company must provide a copy of the partnership agreement
2. Company has sold its products to Target, Johnson and Johnson, and Disney for the past 5 years.
  1. Company can provide copies of the purchase order, photos of its product at these companies, etc.
3. Company’s product is FDA approved and has registered for US Patent protection.
  1. Company must provide FDA approval letter and US patent ID number
4. Company’s management team has successfully built and sold companies in the past for XYZ million.
  1. Company can provide a hyperlink to an article discussing such an event.
Any statements of opinion should be qualified unless they are a matter of general knowledge or unless the company can provide a source. This includes statements about the product, the company, or the market that cannot be validated, or future aspirations of the company that cannot presently be guaranteed. Such statements require qualifying phrases such as “we believe”, “to the best of our knowledge”, or “we plan to”. For example:
1. [We believe] that this puts us in a position to be an industry leader.
2. [We plan to] launch our app in December 20XX.
3. This historic campaign for “It Came From Beyond” is, [as far as we know], the First Theatre Production Funded by Equity Crowdfunding in America and [appears to be] the First Off-Broadway Musical Funded by Equity Crowdfunding. ”
4. Statements like the above -- (first, unverifiable, to the best)
5. Difference between statement of opinion vs statement of fact/stats: generally, statements of opinion are relatively vague and not definitive (can be argued by the reader). For example:
  1. A majority of the american population suffers from XXX = Statement of Opinion
  2. 38.9 million of american adults suffer from XXX = Statement of fact/stat
Statements of opinion generally only need one qualifier. For example, the following statements are OK:
1. [We believe] the traditional golfing audience is aging out, and it is imperative to catch the interest of younger audiences now via a totally revitalized approach to golfing. Millennials are turning to leisure gaming facilities that incorporate important aspects of their lives. This generation works hard and wants to play hard too. As such, we believe that they are on track to become the largest market share in golf, surpassing other generations at a fast pace.
2. [According to our research], millennials require a hip-cool-trendy factor, and 1Up Golf delivers on all fronts.
Statements of general knowledge do not need a qualifier or source. For example, the following statements are permissible by itself:
1. John Lant is also the Production Manager of the most prestigious theatre in New York – Carnegie Hall.
2. Consequently, waste containers provide a habitat for increasing odor, unwanted rodents and insect activity that may thrive as a result of these prime conditions.
Descriptions of the Company’s product or service should give a clear indication of the current development stage. As a whole, the overall story should leave investors with a clear understanding of what the actual current state of the product or service is. Creating a perception that the product is currently functional when it is actually pre-prototype or idea stage may be considered materially misleading to investors, which is a violation of SEC guidelines.
1. If the company is only in the idea or pre-prototype stage, it should be clear to investors that any claims about the product are plans and not current functionalities.
2. If the company is only in the idea or pre-prototype stage, all images of the product of service should clearly indicate that it is not currently available and the image is for illustrations only (it will need this in the image or underneath the image).
Any discussion about future revenue projections needs to be validated internally, or should be excluded. If a company provides information for use in content that makes reference to their future revenues or profitability, they will need to provide a detailed explanation or their projection model showing a reasonable basis for those claims. If they can’t provide this, those claims should be excluded.
1. Refer to this help section article about projections
2. Common examples include:
  1. Company is expected to reach XXX followers by year XXX.
  2. Company will reach XXX amount of sales in the next XXX years.
Please verify whether images provided by the Company are actual product/service images, or computer-generated. Please verify that each image/photo provided by the Company is created and owned by the Company, and not re-purposed from another existing company’s product or service. Be sure to clearly disclose on computer generated images that the product does not exist, the image is computer generated for illustration purpose only.
Certain statements that are prohibited based on SEC guideline and Startengine Policy. If a Company provides opinionated (aka: unsubstantiated/unsupported) statements that infer or suggest return on investment, low risk of investment, positive outlook on the business, promise to provide liquidity for the shares in the immediate future, and the like, those are all prohibited as investment in startup business carries significant risks.
1. Example of prohibited statement: “this is a safe investment”; “we plan on listing on the stock market in the next 6 months”; “the business has been a huge success and has grown exponentially in the past 2 years”; “list of potential acquirers”
2. Example of permissible statement (facts supported by proof): “Our profit has a profit margin of 888%, the cost to manufacture is $3.90 landed and the MSRP is 34.99.”