Regulation Crowdfunding Investor Education

The Site is owned and maintained by Invown Corp, a technology company. Invown Corp is not a registered broker-dealer or funding portal unless a specific disclosure for a specific service expressly states otherwise.

For Regulation Crowdfunding offerings on this Site, “Funding Portal” means Invown Funding Portal LLC, an SEC-registered funding portal and FINRA funding portal member. FINRA’s current funding-portal list identifies Invown Funding Portal LLC with SEC File No. 7-329.

Invown Funding Portal LLC is not a registered broker-dealer and does not provide investment advice or recommendations. The applicable offering documents identify the issuer, exemption, intermediary, escrow or payment provider, and contractual parties for each offering.

This Investor Education page primarily addresses Regulation Crowdfunding offerings conducted through Invown Funding Portal LLC. Rule 506(c) and Regulation A offerings, if displayed on the Site, are governed by different exemptions, offering documents, eligibility standards, reporting obligations, and resale or liquidity rules.

Regulation Crowdfunding / Reg CF

Regulation Crowdfunding, or Reg CF, is the SEC exemption under Securities Act Section 4(a)(6) and SEC Regulation Crowdfunding, 17 CFR Part 227, that allows eligible issuers to offer and sell securities through a registered intermediary. It is sometimes referred to as JOBS Act Title III.

Issuer

The issuer is the company or other entity offering securities. The issuer is responsible for its offering materials, business plan, financial information, risk disclosures, advertising, investor communications, and ongoing reports.

Security

A security may include stock, membership interests, promissory notes, debt instruments, revenue-sharing notes, SAFEs, convertible securities, preferred equity, or another instrument offered by an issuer. The terms of the specific security are described in the offering documents.

Intermediary / Funding Portal

A Reg CF offering must be conducted through a single intermediary, either a registered broker-dealer or a registered funding portal. For Reg CF offerings where Invown Funding Portal LLC is identified as the intermediary, it operates as the funding portal.

Accredited Investor

An accredited investor is an investor that meets the categories in SEC Rule 501 of Regulation D. Natural-person categories may include income, net worth, certain professional certifications, and other categories. Some offering types, including Rule 506(c), may require accredited-investor status and verification.

Before investing, pause and ask practical questions about your own situation and the specific issuer. These questions do not replace professional advice, but they help frame the decision.

• Can I afford to lose all the money I invest?
• If I lose all or part of my money, will I be financially and psychologically okay?
• Do I understand the company, its product or service, its market, and how it expects to make money?
• Do I understand the security I am buying, including whether it is debt, equity, revenue sharing, a SAFE, convertible, callable, preferred, or another type of instrument?
• Do I understand the documents I am being asked to sign, including any subscription agreement or investment agreement?
• Do I trust the issuer’s owners, managers, business plan, and disclosures?
• Have I reviewed the issuer’s risk factors, financial information, use of proceeds, deadline, target amount, cancellation rights, and transfer restrictions?
• Do I feel comfortable making this decision myself, or should I consult a financial, tax, legal, or other advisor?

What Invown Funding Portal LLC may do for Reg CF offerings

• Provide a platform where investors can review Reg CF offerings.
• Make required issuer information publicly available on the platform.
• Conduct required background checks and other review steps to form a reasonable basis that an issuer is eligible to use Reg CF.
• Conduct review steps to form a reasonable basis that an issuer has established a means to keep accurate records of securities holders.
• Deny access to an issuer when required or appropriate because of disqualification, fraud concerns, investor-protection concerns, or inability to assess the risk.
• Provide investor education materials and required questionnaires.
• Operate communication channels subject to Reg CF rules.
• Receive compensation disclosed in the offering materials or transaction confirmation. Any issuer securities received as compensation in a Reg CF offering will be securities of the same class and will have the same terms, conditions, and rights as the securities offered and sold to investors in that offering.
• Use objective search, sorting, or display tools that do not recommend whether to invest.
• Keep required records of investor communications, notices, and offering materials.
• Direct investors to transmit funds to the qualified third party designated for the offering.

What Invown Funding Portal LLC does not do

• Provide investment advice or recommendations.
• Solicit purchases, sales, or offers to buy securities displayed on the platform.
• Compensate employees, agents, or others for solicitation or based on securities sales.
• Hold, manage, possess, or otherwise handle investor funds or securities.
• Guarantee that an issuer will succeed, that an offering will close, or that investors will receive any return.
• Tell investors whether an investment is suitable for them.

Required issuer information, including Form C and related offering materials, will be publicly available on the platform in a manner that allows users to save, download, or otherwise store the information. You do not need to open an account to access this required information, but you must open an account before making an investment commitment.

For Reg CF offerings, required issuer information must be publicly available on the platform for at least 21 days before any securities are sold, and it must remain publicly available until the offering is completed or cancelled.

Before accepting an investment commitment, the intermediary must have a reasonable basis to believe the investor satisfies the investment limits, obtain required investor representations, and use a questionnaire to confirm the investor understands cancellation limits, resale difficulty, investment risk, and the possibility of losing the entire investment.

Each offering page and offering document should explain the specific security being offered. Common private-offering instruments may include:

• Debt securities: debt instruments, such as promissory notes, generally require the issuer to repay principal and any promised interest on stated terms. Debt investors are creditors, not owners, and generally do not share in upside beyond the promised payment terms.
• Revenue-sharing notes: these notes may require the issuer to pay a stated percentage of revenue for a period of time, often with a cap, target return, maturity date, or other payment terms. Revenue timing and amount can be difficult to predict.
• Equity securities: equity instruments, such as common stock or membership interests, represent ownership. The value may rise or fall with the issuer’s performance, and equity holders are generally paid after creditors if the issuer dissolves.
• Preferred equity: preferred equity may have distribution, liquidation, voting, conversion, or other rights different from common equity. It is still equity and generally sits behind creditors.
• Hybrid securities: some securities combine features of debt and equity. Investors should read the terms carefully because priority, repayment, conversion, voting, and distribution rights may differ from ordinary debt or equity.
• Convertible securities: these securities start as one type of security but may convert into another type, such as debt converting into equity. Conversion may be optional, mandatory, or triggered by a future event.
• SAFEs: a SAFE, or simple agreement for future equity, may convert into equity if a future financing, sale, or other event occurs. SAFEs often do not pay interest, may have no fixed maturity date, and may never convert.
• Callable or redeemable securities: these securities may allow the issuer to repurchase, redeem, or prepay the security according to the offering terms.
• Other securities: offerings may use other instruments. Investors should review the offering documents and ask questions before investing.

Investment limits apply across all Regulation Crowdfunding offerings during the 12-month period preceding the transaction, including the current investment. These limits apply to non-accredited investors. Accredited investors are not subject to the same Reg CF individual investment limits, but offering-specific or platform-specific restrictions may still apply.

You and your spouse, and where applicable your spousal equivalent, may calculate income and net worth jointly, but you will be treated as a single investor for purposes of the aggregate investment limit.

Example: if a non-accredited investor has annual income of $80,000 and net worth of $140,000, one value is below $124,000. The investor may invest the greater of $2,500 or 5% of $140,000, which is $7,000, across all Reg CF offerings during the relevant 12-month period.

Investment-limit calculations depend on your circumstances and the information you provide. You are responsible for truthful, accurate representations about income, net worth, accreditation status, and other Reg CF investments.

Accredited-investor status is defined in SEC Rule 501. This summary is not exhaustive and may change over time, but common categories include:

• A natural person with individual net worth, or joint net worth with a spouse or spousal equivalent, exceeding $1 million, excluding the value of the primary residence.
• A natural person with income exceeding $200,000 in each of the two most recent years, or joint income with a spouse or spousal equivalent exceeding $300,000 for those years, and a reasonable expectation of reaching the same income level in the current year.
• A natural person holding certain FINRA licenses in good standing, including Series 7, Series 65, or Series 82.
• A knowledgeable employee of certain private funds, where applicable.
• A director, executive officer, or general partner of the issuer, or of a general partner of the issuer.
• Registered investment advisers, certain exempt reporting advisers, banks, insurance companies, registered investment companies, business development companies, small business investment companies, and rural business investment companies.
• Trusts with assets over $5 million that were not formed for the specific purpose of acquiring the offered securities and whose purchase is directed by a sophisticated person.
• Entities in which all equity owners are accredited investors.
• Employee benefit plans that meet applicable asset or professional-management tests.
• Certain charitable organizations, corporations, limited liability companies, partnerships, Indian tribes, governmental bodies, funds, and foreign entities with more than $5 million in assets or investments, subject to applicable conditions.
• Certain family offices with more than $5 million in assets under management and their family clients, subject to applicable conditions.

Rule 506(c) offerings generally require verification of accredited-investor status before purchase. Regulation Crowdfunding offerings are open to accredited and non-accredited investors, subject to the applicable rules and offering terms.

After reviewing the issuer information and opening an account, you may make an investment commitment if the offering is accepting commitments and you satisfy the applicable requirements. During registration, you may need to establish login credentials, provide investor information, consent to electronic delivery of notices and documents, and agree to applicable platform terms and privacy disclosures. Invown may reject, suspend, or revoke access where permitted by applicable terms, law, or platform requirements.

The Reg CF investment process is conducted online through the Site. Communications, notices, documents, signatures, confirmations, and investment steps are generally electronic, except where another process is required or appropriate.

When you choose to invest, the platform may ask for additional information, arrange payment instructions, and ask you to sign one or more documents with the issuer, such as a subscription agreement or investment agreement. After completing those steps, you will generally have made an investment commitment, subject to the cancellation and reconfirmation rights described below.

Available payment methods may vary by offering and will be shown during the investment process. Payment and escrow or holding services may be provided by third-party financial institutions, escrow agents, payment processors, banking providers, or other service providers designated for the applicable offering. These may include Enterprise Bank & Trust, Luminate Bank, SPPX/North Capital, ACH, wire, check, card, or other methods depending on the offering.

Invown Funding Portal LLC does not hold investor funds. For Reg CF offerings, investors transmit funds or other consideration directly to a qualified third party that has agreed to hold, transmit, or return funds as required.

Upon receiving an investment commitment, the intermediary provides a notice that includes the dollar amount of the commitment, the price of the securities if known, the issuer name, and the date and time by which you may cancel the commitment.

Your right to cancel

You may cancel an investment commitment for any reason until 48 hours before the offering deadline identified in the issuer’s offering materials. During the final 48 hours before the deadline, commitments generally may not be cancelled unless there is a material change that requires reconfirmation.

Early closing

If the issuer reaches the target offering amount before the offering deadline, it may close early only if the offering has been open for at least 21 days, required issuer information has been publicly available for at least 21 days, notice is provided to potential investors and investors who have made investment commitments, the new deadline is at least five business days after the notice, investors may cancel until 48 hours before the new deadline, and the issuer continues to meet or exceed the target offering amount at the new deadline.

If an issuer accepts investments above the target offering amount, it must disclose the maximum amount it will accept and how oversubscriptions will be allocated, such as first-come, first-served, pro rata, issuer discretion, or another disclosed method.

Material changes

If there is a material change to the offering terms or issuer information after you make an investment commitment, the intermediary will notify you, and your investment commitment will be cancelled unless you reconfirm it within five business days after receiving the notice. If you do not reconfirm within that period, your commitment will be cancelled and your funds will be returned.

If a material change occurs within five business days of the maximum offering period, the offering must be extended to allow five business days for reconfirmation.

If the offering does not close

If an issuer does not complete an offering, investors receive a cancellation notice and the intermediary directs the return of committed investor funds.

The Form C disclosure includes, among other things, the following information. This is a summary, not a complete reproduction of every Reg CF disclosure requirement.

• Issuer name, legal status, form of organization, jurisdiction, date of organization, physical address, and website.
• Directors, officers, and similar persons, including business experience and principal occupation or employment history where required.
• Beneficial owners of 20% or more of outstanding voting equity securities, calculated by voting power.
• Description of the business, anticipated business plan, and current number of employees.
• Material factors that make the investment speculative or risky.
• Target offering amount, offering deadline, and statement that commitments will be cancelled and funds returned if the target is not met.
• Whether oversubscriptions are accepted, the maximum amount accepted, and how oversubscriptions will be allocated.
• Use of proceeds, including use of any proceeds above the target amount.
• Process to complete the transaction or cancel an investment commitment.
• Price of the securities or method for determining price.
• Ownership and capital structure, rights of securities, dilution or limitations on rights, valuation methodology, and minority-investor or corporate-action risks.
• Transfer restrictions.
• Intermediary name, SEC file number, and CRD number if applicable.
• Intermediary compensation and financial interests.
• Material indebtedness, related-party transactions, prior exempt offerings, prior reporting failures, and financial condition discussion.
• Where annual reports will be posted and when they will be available.
• Any testing-the-waters materials, if applicable.
• Any other information necessary to make the issuer’s statements, in light of the circumstances in which they are made, not misleading.

The level of financial information required depends on the aggregate Reg CF amount, including amounts sold in the preceding 12 months and the current offering amount. If oversubscriptions are accepted, the maximum offering amount is used for this calculation.

• $124,000 or less: tax-return line-item information plus financial statements certified by the issuer’s principal executive officer, unless reviewed or audited financial statements are available.
• More than $124,000 up to $618,000: reviewed financial statements by an independent public accountant, unless audited financial statements are available.
• More than $618,000: audited financial statements, except that first-time Reg CF issuers raising more than $618,000 but not more than $1,235,000 may provide reviewed financial statements unless audited financial statements are available.

Financial statements are generally prepared in accordance with U.S. generally accepted accounting principles. Reviews are conducted under applicable accounting review standards, and audits are conducted under applicable audit standards. Financial statements are not a guarantee of performance. Investors should read the financial statements, notes, issuer discussion of financial condition, risk factors, and use of proceeds together.

Reg CF platforms provide communication channels where people may communicate with one another and with issuer representatives about offerings. Public visitors may view discussions. Posting comments is limited to people who have opened an account.

If the intermediary is a funding portal, it does not participate in these communications other than to establish guidelines and remove abusive or potentially fraudulent communications.

Any person posting in the communication channels must clearly and prominently disclose with each posting whether they are a founder or employee of the issuer engaging in promotional activity, or whether they have been or will be compensated to promote the offering.

How screening works

Funding portals perform required checks and may generally rely on issuer representations unless there is reason to question them. Platform review does not mean Invown recommends the issuer or guarantees the issuer’s statements.

If Invown Funding Portal LLC later becomes aware of information causing it to believe the issuer or offering presents potential fraud or investor-protection concerns, it must promptly remove the offering, cancel it, and direct the return of committed investor funds.

Bad-actor disqualification

The Reg CF exemption is not available if certain covered persons have disqualifying events within the applicable look-back period, or while certain bars, orders, or suspensions remain in effect. Covered persons include the issuer, predecessors, affiliated issuers, directors, officers, general partners, managing members, promoters, certain compensated solicitors, and beneficial owners of 20% or more of outstanding voting equity securities, calculated on the basis of voting power.

Risk of loss

Investments in private companies and real estate or business offerings can be speculative, illiquid, and risky. You should not invest unless you can afford to lose the entire amount invested. Issuers may fail, underperform, miss projections, change plans, experience delays, or never provide a return.

No recommendation

Invown does not recommend or endorse any investment. Search, browse, category, or display tools are not recommendations and should not be treated as investment advice.

Small-business and private-company risks

• Management risk: many small companies depend heavily on founders or a small management team, and investors may have little ability to change management.
• Limited access to capital: an issuer may need more capital and may be unable to obtain it, or may obtain it on terms that dilute or disadvantage existing investors.
• Limited products, services, and technology: small companies may depend on a narrow product line, a limited customer base, or technology they cannot afford to maintain or improve.
• Cash-flow shortfalls: an issuer may not have enough cash to pay operating expenses, debt service, investor obligations, or planned growth costs.
• Competition and economic conditions: competitors, recessions, interest rates, credit markets, real estate values, tax changes, political events, and other conditions can hurt an issuer.
• Limited controls and insurance: smaller issuers may lack strong accounting controls, internal controls, or sufficient insurance.
• Unreliable projections: issuer projections may be wrong because assumptions change and business performance is difficult to predict.
• Limited disclosure: Reg CF requires significant disclosure, but not the same level of disclosure required in registered public offerings or by publicly reporting companies.
• Limited ongoing information: annual reports may provide limited information and may stop when the issuer becomes eligible to terminate reporting.
• Security and privacy risks: online systems can be attacked, and confidential information may be exposed despite security measures.
• Legal and governance risks: issuers may limit management liability, may not follow public-company governance standards, and may be affected by changes in law.
• Conflicts of interest: Invown may receive compensation when an investment is made, while investors benefit only if the investment performs. Issuer management may also have interests that differ from investor interests.
• Professional-advice risk: investors may choose not to hire legal, tax, financial, or other advisors because the investment amount is small, but lack of advice can increase decision risk.

Security-specific risks

• Debt securities: upside is usually limited to repayment and interest, while downside can include loss of principal. Debt may be unsecured, unguaranteed, subordinated to other lenders, unrated, or priced at an interest rate that does not fully compensate for risk.
• Equity securities: equity generally sits behind creditors in the capital structure. Investors are often minority holders, may have limited or no voting rights, may be diluted, may face tax consequences, and may be disadvantaged by future securities with superior rights.
• Revenue-sharing notes: upside may be capped, revenue can be uncertain, terms may be set without traditional valuation metrics, and investor interests may conflict with management decisions about revenue timing and business strategy.
• SAFEs: investors may not know what the SAFE is worth, there may be no maturity date, the SAFE may never convert, SAFEs typically do not pay interest, and SAFEs may not be appropriate for every issuer.

Resale restrictions

For one year beginning when the securities are issued in a Reg CF transaction, the securities generally may not be transferred unless transferred to the issuer, to an accredited investor, as part of a registered offering, to certain family members or trusts, or in connection with death, divorce, or other similar circumstance.

For these purposes, family members generally include children, stepchildren, grandchildren, parents, stepparents, grandparents, spouses or spousal equivalents, siblings, in-laws, and adoptive relationships. A spousal equivalent generally means a cohabitant occupying a relationship generally equivalent to that of a spouse.

Even after the one-year period, there may be no market for the securities, and the issuer’s governing documents or the securities terms may impose additional limits.

Transaction confirmation

At or before completion of a Reg CF transaction, the intermediary provides a confirmation that includes the transaction date, type of security, identity, price, and number of securities purchased, issuer-level sale information, certain debt or callable-security information where applicable, and the source, form, and amount of any remuneration received or to be received by the intermediary in connection with the transaction, including remuneration from persons other than the issuer.

Annual reports

An issuer that sold securities in a Reg CF offering must file an annual report on Form C-AR no later than 120 days after the end of its fiscal year, unless its reporting obligation has terminated. Annual reports include specified updated issuer information required by Reg CF, financial statements, and a description of the issuer’s financial condition.

At best, investors should expect updated issuer information on an annual cycle. If an issuer becomes eligible to stop filing annual reports, investors may no longer receive current financial information from the issuer through Reg CF annual reporting.

When annual reporting may stop

The issuer may stop filing annual reports when one of the following occurs: it becomes required to file Exchange Act reports; it has filed at least one annual report since its most recent Reg CF sale and has fewer than 300 holders of record; it has filed the required annual reports for at least the three most recent years and has total assets of no more than $10 million; the issuer or another party repurchases all securities issued in the Reg CF offering, including payment in full of debt securities or complete redemption of redeemable securities; or the issuer liquidates or dissolves under state law.

This page primarily addresses Regulation Crowdfunding. Other offering types are different.

• Rule 506(c): offerings may use general solicitation, but purchasers generally must be accredited investors and accredited status must be verified. These offerings are not governed by the Reg CF investor-limit, cancellation, portal-communication, and annual-report framework described above.
• Regulation A: offerings follow their own offering-statement, qualification, investment-limit, reporting, and resale framework.
• Offering documents control: the applicable offering page, offering circular or memorandum, subscription agreement, payment terms, and issuer disclosures determine the rules for the specific investment.

Useful official references include:

• 17 CFR Part 227 – Regulation Crowdfunding
• 17 CFR 227.100 – Crowdfunding exemption and investment limits
• 17 CFR 227.304 – Cancellations, early closings, and reconfirmations
• FINRA Funding Portals We Regulate

Questions about Invown investor education may be sent to info@invown.com or mailed to Invown Corp, 33 Dixwell Avenue, STE 330, New Haven, Connecticut 06511.