Date Posted: 
Thursday, May 18, 2017

The Securities and Exchange Commission's Office of Investor Education and Advocacy has issued an Investor Bulletin to educate investors about a type of security, often described as a SAFE (a “Simple Agreement for Future Equity”), that may be offered in crowdfunding offerings.     

In May 2016, SEC rules went into effect allowing individual investors to participate in securities-based crowdfunding. 

Crowdfunding generally refers to a financing method in which money is raised through soliciting relatively small individual investments or contributions from a large number of people.  Crowdfunding provides individual investors an avenue to participate in the capital raising activities of start-up and early-stage companies and businesses. 

Some issuers have been offering a new type of security as part of some crowdfunding offerings—which they have called the SAFE.  A SAFE is very different from traditional common stock and it is important to understand these differences in order to make an informed investment decision that is right for you. 

For more information, view Investor Bulletin: Be Cautious of SAFEs in Crowdfunding