The SEC’s proposals for crowdfunding are out, and entrepreneurs are getting advice about how to be ready for securities crowdfunding. One good piece of advice is to start building that crowd now. Another piece of advice that is sometimes omitted? Do not tell the crowd that you will be pursuing crowdfunding. See, telling people that you are going to be raising funds is an “offer” of securities, and offers have to be registered with the SEC unless an exemption from registration is available. There WILL be an exemption from registration for offers of securities when Regulation Crowdfunding is finalized and adopted. It isn’t available yet.
So remember the first rule of securities crowdfunding; you don’t talk about securities crowdfunding. Yet.