FAQ: Fundraising

Yes, as long as the following conditions have been met:

1. The campaign will have been open for a minimum of 21 days at the time of the closing;
2. Republic provides notice to any potential investors, and gives or sends notice to investors that have made investment commitments in the offering, of:
   1. The new, anticipated closing date of the offering;
   2. The right of investors to cancel investment commitments for any reason until 48 hours prior to the new closing date; and
   3. Whether the issuer will continue to accept investment commitments during the 48-hour period prior to the new closing date.
3. The new offering closing date is scheduled for and occurs at least five business days after the notice is provided; and
4. At the time of the new closing date, the campaign continues to meet or exceed the target offering amount.

Whether your raise is through our Crowdfunding Portal, OpenDeal Portal LLC, or through our Broker-Dealer, OpenDeal Broker LLC, Republic is always working to expose your campaign to our community of members, including the thousands of active investors on our platform. We take pride in your success, and provide the following opportunities for your campaign to get in front of our audience.

You can rest assured that we are aligned in the success of your campaign, and will do everything in our capacity to support your fundraising efforts. 

A couple of important notes before we dive into the details of our marketing playbook:

• For some offerings — those issued under Regulation Crowdfunding (Reg CF) — we are bound by a regulatory obligation to treat all offerings equally in terms of marketing promotions. Other offerings, such as those offered under Reg A+ or Reg D, may have more flexibility in terms of how the intermediary and its ecosystem can promote the offering, but are often accompanied by heightened compliance requirements. In order to remain in compliance with regulations and our internal policies, Republic retains sole discretion over the exact manner in which your campaign is marketed on our platform, and our marketing promotions are subject to change over time based on what we find to be successful. 

• Once you launch your campaign, various agencies and vendors may contact you and try to win your business by promising extraordinary results. Before engaging with an unknown group, we suggest that you reach out to your Campaign Manager so that we can let you know if we’re familiar with their track record and results.

Our strategy

With fundraising, narrative and momentum are paramount. This is why we encourage all companies raising on our platform to leverage your own communities and networks to seed the round with investment commitments prior to engaging the Republic community. This way, when we are able to drive visitors to your campaign page, the Republic community sees a campaign with visible support — a strong signal to potential investors that your offering is worth their time and attention.

Because Republic does not own the contents of your campaign page, our strategy is to drive visitors to your page and allow your campaign page do the important work of converting visitors to investors. We encourage you to utilize your own marketing tools (such as email lists) as well as tools we provide (such as Campaign Updates) to convert visitors and prospects into committed investors. 

Our tactics

Republic utilizes a variety of marketing channels to drive visibility of your offering.

Website placement

• Homepage placement for ‘Trending’ - Whenever a campaign raises more that $25,000 from more than 100 unique investors within the past 3 days, it will be prominently featured with a ‘Trending’ tag.
  

• Homepage placement for 'Recently Launched' - Once a campaign has reached $25,000 in committed investments, it will be eligible to appear on our homepage under 'Recently Launched'.
  

• Homepage placement for ‘Most Traction’ - The six campaigns which have raised the most money in the past 3 days are featured on our homepage under 'Most Traction'.

• Homepage placement for 'Most Funded' - The six campaigns which have raised the most overall are featured on our homepage under 'Most Funded'.

• Homepage placement for 'Closing Soon' - The six campaigns which are closing soonest are featured on our homepage under 'Closing Soon'.

• “Closing Soon” banner - Your campaign will appear in the header of republic.com for the 48 hours prior to the campaign concluding

Email marketing

• Campaign announcement email - An email will be sent on behalf of your offering when it reaches the following milestones, according to the relevant regulation:

  • Regulation Crowdfunding (Reg CF)* - At $25,000 raised. This ensures that each campaign has activated its own community and network prior to engaging Republic’s audience, increasing the effectiveness of our marketing efforts. This first marketing email may feature two or more campaigns. Note: “Reservation Campaigns” do not qualify for campaign announcement emails, and will need to convert to a full-fledged Investment Campaign prior to receiving this email promotion.

  • Regulation A**+ - At campaign launch

  • Reg D 506(c)** - At campaign launch

  • Red D 506(b)** and Reg S** - No public announcement

• Campaign milestone emails - Reaching subsequent investment milestones will unlock additional marketing opportunities. The content of each of these emails will be at Republic’s sole discretion, but the emails will prominently feature your campaign. Note: If a campaign qualifies for more than one milestone within a 1 week period, Republic will send one email based on the most recently completed milestone. For example, if your campaign raises over $1M in the first week, Republic will generally send a milestone email for $1M reached, but not for all milestones along the way to $1M.

  • $100,000 raised

  • $200,000 raised

  • $500,000 raised

  • $1,000,000 raised

  • $3,000,000 raised

• Republic’s weekly newsletter - Your campaign will appear in our weekly newsletter at the following times:

  • Any week your campaign meets our weekly newsletter theme (at our sole discretion)

  • The week before your offering is scheduled to close

  • Any week in which your offering's "Campaign Update" qualifies for inclusion in Republic's weekly newsletter, according to the following criteria:

    • The Campaign Update must include tangible traction or big product update/change, such as:
      • A feature in a recognized industry publication 

      • A new rollout of product line

      • An endorsement by a recognized name

      • An award from prestigious, sizable industry association or relevant publication

    • You must submit your Campaign Update through this form.

    • Form is open each Thursday at 3pm ET for inclusion in the following week’s newsletter.

    • Due to limited space, only the first 10 to meet the criteria below will be featured in the newsletter.  

    • Update must be posted on your offering page as a Campaign Update so that it can be linked to from the email

Social media

Republic will raise visibility for your campaign on our social media platforms at various points during your campaign. Please note that we retain sole discretion over which channels and placements these mentions occur; the social media landscape is ever changing, as are our strategies for effectively reaching and engaging our communities.

Currently, all offerings (excluding “Reservation Campaigns”) are featured at the following times:

• Campaign launch roundup - Posted to Republic’s social media channels the week of your campaign launch

• Closing soon notification - Posted to Republic’s social media channels the week of your campaign launch

Social Media:  Republic will repost up to 1 instagram story and 1 Twitter post per founder if @Joinrepublic is tagged while your campaign is live. Please inform your campaign manager when you plan to post and ensure your post follows Republic's compliance guide

* - Offering type is facilitated by OpenDeal Portal LLC
** - Offering type is facilitated by OpenDeal Broker LLC

Effective August 30, 2023.

Republic campaigns are live for 60 days, which we’ve identified as the ideal timeline for a successful and efficient raise. If your campaign includes a reservation period, this is not included in the 60 day duration. Please contact the Republic team for more information about campaign timelines.

C-Corporations and Limited Liability Companies (LLCs) can fundraise on Republic. 

No, only United States-based companies can raise via equity crowdfunding per US law.

No, as long as your company is based in the United States it does not need to be incorporated in a particular state to fundraise on Republic.

GAAP refers to "generally accepted accounting principles", an industry standard for reporting financial information. To fundraise using Regulation Crowdfunding, you must submit your financial statements in GAAP format.

If they're formatted like this example, meaning many of the same items and information (ex. issuance of stock) are covered in the same way, they're probably GAAP. That said, it's not just a question of formatting, and this isn't financial advice. 

If you're still not sure, it's best to check with a CPA. 

Remember, if you want the ability to raise over $124,000, you must have your GAAP finances reviewed by an independent CPA.

You must disclose your last 2 fiscal years in GAAP (Generally Accepted Accounting Principles). If you want to raise more than $124,000, these financial documents must be "Reviewed," Not Audited, by an independent CPA. Here is an example of what completed finances look like.

• Only U.S.-based companies are accepted (you have to be incorporated in the US)
• Only companies that pass the criteria of our investment committee
• More criteria listed here

Anyone in your company that falls into one or more of these categories must provide Republic their full name legal name, SSN/TIN, phone-number, address and DOB:

• Officer (anyone with "officer" in their title);
• Director (anyone on your board, but not informal advisors); and/or
• Any person or entity that holds 20% or more of the company.

 By being affiliated with Republic, you get a special discount on Form C reviews through our independent attorneys we have partnered. How the flat fee is determined is explained below.

Number of Prior Issuances of Securities to Investors (Equity, Debt, SAFE, SAFT, etc.)

Depending on how many previous securities offerings you've conducted, our partners will determine the cost of your Form C review and filing based on the following formula:

Services Included using flat fee pricing with vs. without Republic’s Referral

Additional Service Fee

Note: Standard Billing (per hour) includes $400 for an attorney, $150 for a paralegal, and $100 for a legal assistant. Flat-free pricing includes approximately 10 hours of legal review. Client may be billed based on the firm’s standard fee schedule for special circumstances. Any client work to be billed beyond the standard flat fee will require prior client approval and an applicable retainer. 

Raising via investment crowdfunding on Republic is not a heavy lift, contrary to what you might expect. 

Please note: these fees are not paid to Republic, but are objective costs associated with preparing the documents and running a compliant campaign. Republic only takes commission on successful campaigns.

• Form C: $1,500
  The SEC requires fundraising companies to provide certain information on Form C.  This disclosure informs prospective investors and is provided to the SEC.  iDisclose, a third party service provider, helps you complete a Form C in about 9 hours when it would normally take over 4 weeks manually. We also have inhouse staff to help you along the way. You are required to pay this cost up-front when you start using the service.
• Escrow: Approximately $1,500
  All campaigns must have an escrow agent.  The costs of escrow vary depending on the number of investors you end up with and is not paid until after the campaign is over, directly out of the proceeds of the escrow account.

Baseline cost total: $3,000

Other potential costs:

• Financials: $1,000–$4,000
  If your financials are not complex, you have been diligent with bookkeeping and you are organized expect this cost to be in the middle to lower range. If you already have GAAP converted financials your costs will be lower. If you have a licensed CPA on the team your costs can be $0. If you use professionals expect the bill to be sent once services are complete.
• Video: $0
  Spend as little or as much as you want. It’s up to you. Already have a video? Chances are you can use that for your campaign.
• Attorney review: $0-$3,500
  If you have an in-house counsel or your own representation, you can use their services. If you need representation, our partners offer a flat fee structure for Form C compliance and legal review. In addition they will file your Form C, all amendments during the campaign (if applicable) and your post campaign Form C-U declaring the campaign end. Finally, they will help you setup and review your investor agreement (i.e., the security you are selling to investors - most likely our Crowd Safe). This bill is typically paid upfront.
• Marketing budget: $0
  We highly recommend, but do not require, you to spend money on marketing, social media or otherwise. There might be a live event you want to attend, you might decide to have a party. These costs are optional and you decide on the total costs, but can have major impact on how much you raise. 
• Credit Card: ~2.5%
  If you would like your investors to have the convenience of using a credit or debit card for investment a ~2.5% fee is charged by the service provider. For example if an investor uses their card for a $100 investment your fee would be $2.50. This would only apply to investments made with a credit or debit card, and only if the campaign is successful. Please note, currently Token DPA offerings cannot utilize credit card processing.

Related: What commission does Republic charge?

Absolutely, yes! Using Republic's own integrated transfer agent service, we have an awesome partnership with Carta for companies to represent their investors as one line item in summary on their cap table. They also provide a special discount to companies that have raised on Republic. 

Absolutely! To refer a company to raise with Republic, please send them to our application page (republic.com/apply/new).

Republic offers companies a nominee solution for our SAFE in which investors are represented as a single line item on your company’s cap table summary, and there is no limit to the amount of investors who can participate. If you choose to convert investors to equity after raising more rounds, those investors who invested via a nominee round on Republic can be converted to a single equity shareholder (and “holder of record”) on your cap table through a custodial arrangement, with the custodian represented as the owner of record. 

We created this custodial solution to increase investor protections and make cap table management easier for companies using Republic. It also happens to mitigate the 12(g) holder of record threshold concern. When held in custody, all Republic investors are considered one (1) holder of record so companies stay below the 12(g) threshold for public reporting with respect to their Republic raise.

Companies that did not use the custodial model during their campaign may be able to use its benefits of cap table management and investor protection  at subsequent financing or other trigger events.

In addition to U.S. federal securities laws, individual states have their own securities laws, called “Blue Sky Laws,” that regulate the offering and selling of securities in their jurisdiction and implement safeguards for investors against securities fraud. 

Who is affected?

If your principal place of business is located in one of these states, and/or if residents of one of these states purchased 50% or greater of the aggregate amount of your offering, you may be subject to notice filing obligations.

See the updated list of states with the corresponding notice obligations here.

Where is my principal place of business?

A company’s principal place of business is the location where officers direct, control, and coordinate the company’s activities. This is typically the location where the primary functions and decision-making activities of the enterprise occur. The principal place of business is generally the location where the headquarters of a company is situated, but not always.  

Legal notice

Blue Sky laws vary by state and require issuers to register securities offerings and sales within the state, unless an exemption is available under the Securities Act of 1933. Title III of the Jumpstart Our Business Startups (JOBS) Act of 2012, also called Regulation Crowdfunding (Reg CF), provides an exemption. 

Title III of the JOBS Act preempts certain Regulation Crowdfunding (Reg CF) transactions from registration under state Blue Sky Laws. However, some states still require notice filings be made in order for the state to review the securities offering. A Reg CF notice filing usually comprises of: (1) a Form C filed with the SEC (you are doing this already); (2) a consent to service of process on Form U-2; and (3) the state filing fee, if applicable. This filing should be made to the state securities regulators, as indicated by each state’s statute.

This FAQ sheet does not constitute as legal advice, please consult with your legal counsel as to whether a state filing is necessary for your offering. This summary was last updated on July 8, 2019.

What is a nominee?

As companies grow and change over time, they sometimes need investors to make decisions about their investments or about the future of the company. A nominee is an agent that has the right to act on behalf of investors—rather than having companies collect decisions individually from thousands of Republic investors. Republic’s nominee process has specific contractual rights, including voting, which follow a predetermined company appointee’s instruction (often the company's CEO, its board, or an existing major investor). This also includes the ability to agree to convert investments into custodial accounts on behalf of investors. Learn more about custodial accounts here.

For offerings using a nominee through Republic, Republic Investment Services LLC (f/k/a/NextSeed Services, LLC), a subsidiary of OpenDeal Inc. dba Republic is the nominee. A nominee rider is attached to each company’s Crowd SAFE or relevant security instrument. .

Note: The nominee is typically only used in Regulation Crowdfunding offerings.

What does this mean for founders?

In short, the nominee structure allows companies to keep their cap tables clean and makes the mechanics of fundraising post-Republic campaign as seamless as possible.

While represented by the nominee, each individual investor remains a holder of record, but the nominee is representing a block of SAFEs that are not currently shareholders. When companies raise more capital from VCs or other private investors after their Republic campaign, they have the choice to convert their Crowd SAFE into shares. Upon conversion, the nominee structure allows companies to only add one additional shareholder (or one “holder of record”) to their cap table—not the thousands of Republic investors individually—by electing to accept the shares through a custodial solution. The nominee can, on behalf of investors, consent to holding the shares investors are entitled to “in custody” or “in street name” with a custodian. This custodian is the single shareholder and holder of record, while investors are “beneficial interest holders” and have the economic rights to their investment. 

Teaser Pages from Republic are a new, fast tool for founders and entrepreneurs to collect interest from investors.

Recent changes to regulations have made it easier than ever to raise funds from retail investors. But entrepreneurs are time constrained, and launching a campaign has an opportunity cost. With Teaser pages, entrepreneurs can quickly validate investor interest in a potential campaign.

To be eligible to raise up to $5M in a 12 month period, your company must be a U.S.-based C-Corp, LLC, or public benefit corporation. To launch an investment campaign, you and your company will need to pass a due diligence process to evaluate fit, market, team, traction, and reach, including the number of followers your Teaser Page attracts.

Creating a Teaser Page takes minutes. Entrepreneurs only need to add a company name, logo, sector, summary, and at least one web link. Entrepreneurs will need a Republic account to get started, and can only have one published Teaser page at a time.

Teaser Pages can help your audience find your company across the web. While you can drop any URL in the “Links” section of your Teaser, we’ll recognize the following list of well-known and supported social networks: AngelList, Crunchbase, Twitter, Instagram, LinkedIn, Facebook, YouTube, TikTok, Discord, Medium and Pinterest.

Please refer to Regulation Crowdfunding Rule 206 pertaining to promotion or public discussion of your Teaser Page, which requires certain disclosures and that you retain copies of your communications for compliance purposes.

The following disclosure must be included in all communications:

(i) no money or other consideration is being solicited thereby, and if sent in response, will not be accepted, (ii) no offer to buy the securities can be accepted and no part of the purchase price can be received until the offering statement is filed and only through a registered intermediary’s platform, (iii) an indication of interest is non-binding and involves no obligation or commitment of any kind.

For more information, please visit the SEC website for all crowdfunding rules and regulations.

Teaser Pages are an optional way to start the journey of raising with Republic. At any point, entrepreneurs can submit an application, go through due diligence, and get started with a more formal Reservation Campaign or Investment Campaign. If you start with a Teaser Page, you’ll already have an audience for your future campaign!

Teaser Pages are meant to be a way for entrepreneurs to activate their network, but we’re here to help. When a Teaser Page is published and has five or more followers, we’ll share three of the most recent, highest traction pages with our investor base on our Coming Soon page. Entrepreneurs will be able to see new followers from our network as well as their own.

Nope. It’s totally free.

Transfer agent manages and maintains records of securities ownership for a company. Transfer agents can also facilitate proxy voting and manage dividend/interest payments, issuances, transfers, lost shareholder searches, and much more. Most importantly, when your company converts the security you issued into common stock, preferred stock, cash, or something else, a Transfer agent is there to ensure that the conversion is smooth and compliant with applicable securities laws and regulations.

It’s important to make sure that the Transfer agent you engage is registered with the SEC. In terms of a timeline, it’s regulatory best practice to engage a Transfer agent by the end of the fiscal year (September 30) in which your campaign ended, or before any liquidity event or subsequent equity financing.

Brassica Services LLC (“Brassica”) is an integrated Transfer agent solution. Brassica handles the recordkeeping, reporting and communications for Republic hosted offerings and thousands of shareholders by way of a secure software integration between our two platforms. Republic and Brassica have joined forces to create a streamlined experience that simplifies engaging a transfer agent for issuers, and makes tracking and updating investor information less stressful. 

If an issuer is engaged with Brassica as their Transfer agent, you can come to 
Republic directly for any changes related to your security by 
emailing investors@republic.co or you can contact Brassica directly at 
help@brassicaservices.com. For your convenience, you won't need a separate login to a Brassica portal and all information can be managed through your Republic account.

To meet regulatory requirements and stay compliant, it is important that you engage a transfer agent as outlined in your Campaign Agreement. We have partnered with Brassica Services LLC, an SEC-registered transfer agent and a subsidiary of Brassica Technologies Inc. (“Brassica”) to offer you an integrated, cost-effective, and compliant transfer agent solution.

• Brassica’s programmatic transfer agent will enable you to:

• Maintain an accurate record of all investors and their holdings.

• Issue and cancel securities.

• Transfer securities in the event of a change in beneficiary or sale.

• Gain access to comprehensive reports on securities, investors, and transactions.

• Complete investor distributions such as dividends.

• Facilitate secondary liquidity through Brassica’s integration with Republic’s Secondary Market.

Enjoy a cost-effective solution for your transfer agent needs with Brassica. The cost of the first year's annual subscription fee for Brassica's transfer agent will be included in your campaign fees, and will be paid to Brassica on your behalf. Brassica will invoice you directly for all subsequent annual fees.

Republic Secondary Market enables your investors to sell their securities and provides a clear path to liquidity. Once your fundraising is complete and holdings have been confirmed, your company will be added to Republic's portfolio of companies. Only certain companies are eligible to participate in the Secondary Market, depending on their Transfer agent, the assets used to raise funds, and other factors such as holding period restrictions. You can find the terms of the secondary market here.

You can opt out of Republic Secondary Market. To do so, reach out to your Campaign Manager to make your company ineligible. However, it's important to keep in mind that investors highly value the promise of liquidity, and having access to the secondary market may attract more people to invest in your offering.

Sellers are the ones who post their intent to sell at a given price, so they control Republic Secondary Market prices.

Yes, we provide you with a dedicated market dashboard that allows you to track all transactions that affect your assets. There, you can see details such as the state of the transaction, the seller and buyer user profiles (same as what you have for primary offerings), and the respective agreements.

The Transfer agent is responsible for maintaining records of ownership and ensuring compliance. Republic has partnered with Brassica as our preferred Transfer agent and has integrated directly with Brassica to support digital settlement of transactions via APIs. However, we are not yet digitally integrated with other Transfer agents, which makes running a secondary market unfeasible while relying on manual processes.

No, Republic Secondary Market is completely free for both issuers and investors.

The eligibility requirements for your initial offering will depend on the regulatory framework used. You can find the exact requirements in the market terms here, under the ELIGIBLE SECURITIES section.

No penalties or costs will be applied, but your company will become automatically ineligible, and investors will not be able to request to sell or buy your assets in Republic Secondary Market. It is important to remember that this creates a poor experience for your investor community.

We work with Sharedrop customers to create a fair commission system for Republic that includes a flat platform fee and a securities commission. A securities commission means Republic receives a small piece of the equity you give away in the offering, just like all other offerings Republic hosts.

That's up to you, but we've seen companies consider everything from $50,000 to $1,070,000 worth of equity.

Historically, they were. A Sharedrop, however, is conducted using Reg. CF squarely within the four corners of the Securities Act of 1933. In short, a 2016 change to regulations and Republic's legal innovation has made it feasible by allowing companies to collect alternative forms of consideration, so when we say "free" we mean free of cash, but not value going from the investors to your company.

Almost any privately-held United States-based company — C-Corps, LLCs, and PBCs. If you have questions on your eligibility, drop us a line at investment@republic.co.