Resources
Know the rules before you raise.
Plain-language guides, answers to the questions we hear most, and the federal and state resources a company needs, with self-checks you can run privately.
Guides
What is worth knowing before you start
Plain-language explainers for the parts companies get wrong. None of it is legal advice, and all of it is written to be handed to counsel rather than instead of counsel.
Five questions to settle with counsel first
- Rule 506(b) or Rule 506(c)?
- Rule 506(b) may not be generally solicited: access is by invitation, and the company should be able to show how it knew each person before the offer. Rule 506(c) permits general solicitation, but every purchaser must be accredited and the company must take reasonable steps to verify it. The answer usually follows from how you intend to find investors.
- Testing the waters without making an offer
- Sprowtt supports it. Under Regulation A, a federal exemption, you may ask whether anyone would be interested before the offering statement is qualified (Rule 255). No money may be solicited or accepted, no commitment of any kind may be sought, and an indication of interest is not a commitment of any kind. Words like “invest now”, “reserve your shares” or “your commitment” turn an indication into something else. Stating the price or the amount you are testing is allowed.
- Rule 147A and residency
- Offers may be seen outside the state; sales may be made only to residents of the company's state. A written statement of residency from the purchaser is not enough on its own. The offering also relies on the state's own exemption — in Florida, section 517.0611 (Limited Offering) or section 517.0612 (Invest Local). For a Florida Limited Offering (s. 517.0611), the company files Form FLO with the OFR, with a $200 fee, at least 10 days before the offering starts or is shown on an intermediary's website; a Limited Offering of $2.5 million or more must use a registered dealer or intermediary. For Invest Local (s. 517.0612), the company files Form OFR-FILE at least 5 business days before the offering starts; no intermediary is required.
- Do we need an escrow agent?
- For a Rule 506 offering, usually not. Where one is wanted, the company chooses a bank or escrow agent, contracts with it directly and pays its stated price directly. Each escrow provider sets its own price per offering.
- The closing binder
- One dated file of the deal-room sections, the documents, the investor register and the timestamps. Assembling it at the close is far cheaper than rebuilding it later.
Insights
- The notice belongs on your page, not ours
- Most platforms put your offering in their catalog, because the catalog is their asset. We render the card and your own website displays it.
- Why a 506(b) card will not paste onto a homepage
- Rule 506(b) has no general solicitation. So the embed refuses to render a 506(b) card publicly, whatever is in the page.
- Why this website holds no licence
- This website is software, not a portal. The wording exists so a securities lawyer never has to guess what it is.
Federal and state resources
- Insights — short pieces on how this software is built and why
- The FAQ, which answers the commercial questions rather than the legal ones
Frequently Asked Questions
The questions companies ask us most
Commercial answers, in plain language. None of it is legal advice, and where a question has a legal answer we say whose job it is.
+Is Sprowtt a funding portal?
This website is a SaaS application. It is not operated as a registered federal funding portal. Regulation Crowdfunding requires a registered funding portal, and this software is not one. StateCF (statecf.com), a DBA of Sprowtt Inc., is a Florida OFR-registered intermediary. Registration does not imply that such person has been sponsored, recommended, or approved by the state or an agency or officer of the state or by the United States or an agency or officer of the United States. It runs under its own terms and disclosures.
+Do you list our offering on your website?
No. Sprowtt publishes no catalog of offerings and does not advertise a company's offering. The notice is rendered onto the company's own website through the embed, where a notice of the company's offering belongs.
+Who pays, and for what?
Companies and counsel firms pay a monthly subscription, billed in advance: each invoice is due on the first day of the period it covers. Any use that runs into a new month is billed as that full month; there are no partial months. You can also prepay 3 months or 6 months up front at a discount, shown on your billing page. Fees are not based on the amount of capital raised or the outcome of an offering, and there is no activation fee and no success fee.
+Do you hold investor funds?
Sprowtt is not intended to receive, custody or control investor funds through this platform. Escrow, banking and payment processing sit with banks and providers the company chooses and contracts with directly. Sprowtt receives no referral fee, commission, markup, revenue share, or other compensation from banks or escrow providers.
+Do we need an escrow agent for a Rule 506 offering?
Usually not. Where one is wanted, the company chooses any bank or escrow agent, contracts with it directly and pays its stated price directly; each escrow provider sets its own price per offering. Sprowtt receives no referral fee, commission, markup, revenue share, or other compensation from banks or escrow providers.
+Can the notice live on our homepage?
Where the exemption allows it, paste a script or an iframe, or point a subdomain at us with a CNAME. No FTP, no cPanel, no server privileges. A Rule 506(b) room is invitation-only and will not render on a public page. Counsel should review any public-facing content.
+What workflows does the software cover?
Federal exemptions: Rule 506(b) and Rule 506(c) under Regulation D, and testing the waters under Regulation A. For state intrastate offerings: Rule 147A files. Rule 147A is a federal rule that an intrastate offering relies on alongside the state's own exemption. Completing a software step does not make an exemption available or an offering compliant. Counsel reviews the specific transaction.
+Does Sprowtt support testing the waters?
Yes. A Regulation A test-the-waters room collects reservations (non-binding indications of interest) only: no money is taken, nothing is sold, and a reservation involves no obligation or commitment of any kind. The notice carries the statements Rule 255 requires, and once the Form 1-A is publicly filed it says where the preliminary offering circular can be obtained. The language check blocks buying and commitment wording on the room, its notices and the company's investor updates.
+We only want to test the waters. Which plan is that?
The Reg A lab plan. It is the plan for a company that is only testing the waters under Regulation A: the test-the-waters room and notice, reservations counted and totalled, the readiness checklist, counsel review and the filings tracker. Like every plan, it is a flat monthly subscription, not a fee on any amount raised.
+Who files Form D and the state notices?
The company and its counsel. Completing a checklist in Sprowtt files nothing. The workspace tracks each filing's status, date and file number, and sets Form D's due date from the first sale; counsel prepares and files it.
+Does Sprowtt find investors?
No. Sprowtt does not meet with, introduce or match investors, and its tools are not used on their own for investor outreach. The company communicates with its own investors, using Sprowtt's tools.
+Does Sprowtt contact investors?
Sprowtt does not solicit investors. We never reach out to investors or ask anyone to invest. An investor who comes to this site does so on their own or through a company's own communications about its offering, never through a solicitation by Sprowtt.
+Do you introduce investors or sell lead lists?
No. This platform is not an investor-introduction service and not a lead marketplace. Completing a workspace step is not a request for investors. Confirm any capital-raising path with counsel.
+Can a company send updates to its investors?
Yes, once the company turns investor updates on. The company writes each update and sends it itself, only to people already in its own deal room; there is no way to upload or buy a list. Each email names the company as the sender, carries its postal address and an unsubscribe link, and the same language check as a material-change notice runs first. The company can have its securities counsel approve each update before it goes out. Sprowtt supplies the tool and keeps the record; it does not write, review or send updates on anyone's behalf.
+How is accreditation verified in a Rule 506(c) offering?
Every purchaser in a Rule 506(c) offering must be an accredited investor, and the company must take reasonable steps to verify it. In the deal room, the investor uploads a letter dated within the last 90 days: from a verification service such as InvestReady or Verify Investor, which the investor uses directly on its own website (Sprowtt lists them as courtesy referrals and does not connect to them), or from their own attorney or CPA. Where the company has set a high minimum investment (at least $200,000 for an individual, $1,000,000 for an entity accredited by its assets, or $1,000,000 or $200,000 for each equity owner for an entity whose owners are all accredited), the investor may instead commit to that minimum and state in writing that they are accredited and that no third party is financing the minimum for this investment; the company must confirm it knows of nothing to the contrary. That route comes from the SEC staff no-action letter, Latham & Watkins LLP (March 12, 2025), and counts only while the investor's subscription is at least the minimum. The company reviews each verification and accepts or declines it; Sprowtt does not decide whether anyone is accredited and uses no AI in this step. An accepted verification is good for 90 days from the day the company accepts it. Until one is current, the company cannot accept that investor's subscription or mark them paid. The letter can be opened only by the investor, the company and Sprowtt's Super Admin.
+How do I know whether I am an accredited investor?
Try the self-check at sprowtt.com/accredited-investor-check: plain yes-or-no questions written from the SEC's definition (17 CFR 230.501(a)). It is education only, it runs in your browser, and nothing you answer is stored. It is not a verification: in a Rule 506(c) offering the company verifies, and only the company, with its counsel, decides who may invest.
+Does Sprowtt review our offering for compliance?
No. The company runs its offering and its securities counsel reviews it. Sprowtt is built to work alongside the company's securities counsel: it supplies the tools and keeps the record, and it gives no legal advice and approves no offering.
+Does Sprowtt use AI with investors?
No. Any AI tools Sprowtt provides are for companies only, for their own information and to help them run their deal room. Sprowtt does not use AI to communicate with investors, to recommend or rate any offering, or to influence any investor's decision to buy a security. Anything a company publishes is the company's own statement, reviewed and adopted by the company and its counsel.
Federal Offering Resources
The federal exemptions, in plain language
Educational, not legal advice. The federal exemptions Sprowtt supports, in plain language with their citations: Rule 506(b) and Rule 506(c) under Regulation D, Regulation A including testing the waters, and Form D. These are federal rules, set by the SEC; state law is on State Offering Resources. Your counsel decides what applies to you.
Rule 506(b)Private, no general solicitation
No limit on the amount raised. No general solicitation or general advertising (17 CFR 230.502(c)), which includes a seminar or meeting whose attendees were invited by general solicitation. Any number of accredited investors, and no more than 35 non-accredited purchasers in any 90-calendar-day period, each sophisticated alone or with a purchaser representative (230.506(b)(2)). Non-accredited purchasers must receive disclosure and financial statements at the Regulation A level, and a chance to ask questions (230.502(b)).
Rule 506(c)Advertised openly, accredited purchasers only
No limit on the amount raised, and general solicitation is allowed. Every purchaser must be accredited (230.501(a)), and the company must take reasonable steps to verify it (230.506(c)). The rule lists verification methods that are not the only ones allowed: IRS forms for two years with a written representation; asset and liability documents dated within three months plus a credit report; a written confirmation within three months from a registered broker-dealer, SEC-registered investment adviser, licensed attorney or CPA; or a representation from a person verified within the past five years (230.506(c)(2)(ii)).
SEC staff no-action letter, Latham & Watkins LLP (March 12, 2025): a company is viewed as having taken reasonable steps to verify when it requires a minimum investment of at least $200,000 from a natural person accredited under 230.501(a)(5) or (a)(6), at least $1,000,000 from an entity accredited under 230.501(a)(3), (7), (9) or (12), or at least $1,000,000, or $200,000 for each equity owner, from an entity accredited under 230.501(a)(8) because all its equity owners are; obtains written representations that the purchaser is accredited and that the minimum is not financed in whole or in part by any third party for the specific purpose of the investment; and has no actual knowledge of facts to the contrary. The minimum may be a binding commitment paid in installments as and when called. This is staff no-action relief, not a rule amendment. Sprowtt does not verify accreditation; the company does, and Sprowtt records the statements, the commitment and the company's confirmation.
Accredited investors
For a natural person, the main tests are net worth over $1,000,000, alone or with a spouse or spousal equivalent, not counting the primary residence (230.501(a)(5)); or income over $200,000, or $300,000 jointly, in each of the two most recent years with a reasonable expectation of the same this year (230.501(a)(6)). Directors, executive officers and general partners of the company raising capital also qualify (230.501(a)(4)).
Regulation A and testing the waters
Sprowtt supports testing the waters: its Regulation A room collects reservations (non-binding indications of interest) only, with no money taken and nothing sold.
Regulation A allows up to $20,000,000 in 12 months under Tier 1 and up to $75,000,000 under Tier 2 (17 CFR 230.251(a)). A company may test the waters, before and after it files its offering statement on Form 1-A, under Rule 255 (17 CFR 230.255). It may make no sale until the offering statement is qualified (230.251(d)).
Before qualification, no money or other consideration, and no commitment, binding or otherwise, may be solicited or accepted from anyone. Every testing-the-waters communication must say three things: that no money or other consideration is being solicited, and if sent in response will not be accepted; that no offer to buy can be accepted and no part of the purchase price received until the offering statement is qualified, and any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of its acceptance is given after qualification; and that an indication of interest involves no obligation or commitment of any kind.
After the offering statement is publicly filed, each communication must also say where the preliminary offering circular can be obtained, or give its web address, or include a copy. Material that later turns out to be materially inaccurate must be corrected and sent again. Rule 255 does not forbid stating the price per share, the valuation or the total amount the company expects to raise.
Form D and the bad-actor rule
Form D is filed on EDGAR no later than 15 calendar days after the first sale in a Rule 506 offering, moving to the next business day when that day falls on a weekend or holiday. It is amended for material mistakes and changes, and every year while the offering continues (230.503).
Rule 506 is unavailable when a covered person, such as a director, executive officer, 20% voting holder, promoter or anyone paid to solicit purchasers, has a disqualifying event (230.506(d)). Events before September 23, 2013 do not disqualify but must be disclosed (230.506(e)). Regulation A has the parallel rule in 230.262.
Securities sold under Rule 506 are restricted: they cannot be resold without registration or an exemption (230.502(d)).
Related pages
State Offering Resources
Where state law applies to an offering
Educational, not legal advice. Where state securities law bears on an offering: state notice filings for federal offerings, state review of Regulation A Tier 1, and the state's own exemptions for intrastate offerings. Your counsel decides what applies to you.
Federal and state, kept apart
Rule 506(b) and Rule 506(c) (Regulation D) and Regulation A are federal exemptions, set by the SEC. They are not state offerings. A state offering is one made under a state's own exemption, such as Florida's section 517.0611 (Limited Offering) or section 517.0612 (Invest Local), to that state's residents. What follows is only the part state law plays. The federal rules themselves are on Federal Offering Resources.
State notice filings for federal Rule 506 offerings
Securities sold under Rule 506, a federal exemption, are covered securities, so states generally cannot impose their own registration. What they can still require is a notice filing and a fee, usually a copy of the federal Form D, and they retain their antifraud authority in full.
Most states take that notice through NASAA's electronic filing system. Which states, when, and at what fee depends on where your purchasers are — which is a question about your investor list, so it is answered late in the process and often more than once.
State review of federal Regulation A offerings
Regulation A is a federal exemption. A Tier 2 Regulation A offering preempts state registration for qualified purchasers, but states may still require notice filings. A Tier 1 offering does not get that preemption and is reviewed by the states where you offer — which is where the coordinated review process and the blue-sky budget come in.
Rule 147 and 147AThe federal rules behind an intrastate offering
Rule 147 (a federal safe harbor under section 3(a)(11) of the Securities Act) and Rule 147A (a stand-alone federal exemption) are the federal rules a state intrastate offering relies on; the offering itself is made under the state's own exemption. Rule 147A is a federal exemption for an intrastate offering. It permits offers to be seen outside the state, and it permits sales only to residents of the company's own state. It does not itself register anything: in Florida the offering also relies on the state's own exemption, section 517.0611 (Limited Offering) or section 517.0612 (Invest Local).
For a Florida Limited Offering (s. 517.0611), the company files Form FLO with the OFR, with a $200 fee, at least 10 days before the offering starts or is shown on an intermediary's website; a Limited Offering of $2.5 million or more must use a registered dealer or intermediary. For Invest Local (s. 517.0612), the company files Form OFR-FILE at least 5 business days before the offering starts; no intermediary is required.
Florida companies can conduct Invest Local (s. 517.0612) and Limited Offering (s. 517.0611) raises on StateCF.com. Invest Local does not require an intermediary; a Limited Offering of $2.5 million or more must use a registered dealer or intermediary. That is StateCF, not this software.
What Sprowtt does about it
- Keeps a filings tracker: what is drafted, what is filed, the file number and the date
- Sets Form D's due date at 15 days after the first sale entered
- Assembles a dated closing binder of the file for counsel
Related pages
Resources
Self-checks, lists and more
Sprowtt is not a stock transfer agent and is not an accredited-investor verification service. The services listed here are courtesy referrals only. Sprowtt has no ownership in, partnership with, or referral arrangement with any of them, and receives no referral fee, compensation or other benefit from them. The company or investor that uses a service chooses it, contracts with it and pays it directly. A listing is not an endorsement.