Material changes
Is there a downside to doing a material change?
Yes, there could be. All material changes to the Form C require asking all existing investors in your campaign to reconfirm their investments. If investors do not reconfirm during the 5 business day reconfirmation period, their investments are automatically cancelled. They can reinvest at a later point if they simply miss the window.
On average, we see about 10% attrition (in dollars raised) at the end of the reconfirmation period following a material change. Please note that the percentage can be heavily skewed if even just one large investor fails to reconfirm. You are able to reach out directly to individuals who do not reconfirm asking them to reinvest at any point during the remainder of the campaign.
Sometimes material changes are unavoidable due to outside forces. We just ask that you consult with your attorneys or keep us in the loop on any updates if you are unsure if they may require a material change. We are happy to discuss and help ensure that you remain compliant.