What can you share
One of our OG members recently asked:
What can I share about individual deals and about my own activity on Play Money?
They were asking from both a “legal” and “culture” standpoint. And it’s a valid question when you notice a big fat SHARE button at the top of most Play Money deal memos. (We have permission from the founder to enable that, fwiw.)
Here’s the legal TLDR on sharing individual deals:
🎯 You can use the “sharable deal link” from Play Money in personal emails and in private deal sharing and angel communities of accredited investors.
❌ Don’t share the link on social media or in large public newsletters or communities.
🥴 You can share your investment in the company AFTER their raise closes. Our closing of the SPV on Play Money is not always correlated with the closing of the raise, so don’t assume.
We have all seen folks' “matchmaking” deals trample all over these rules on social media and big newsletters. Gary Gensler has not sued any of them. However, we are registered advisors (Wanna see my FINRA CRD??). Compliance is Queen. That’s our story, and we are sticking to it.
But let’s get real. Every time I write a check to a founder, I want to shout from the rooftops about it. I am so excited and want to get the word out to other potential co-investors. (This is why we are building the social network for Angel).
Until we turn our vision into reality, think of it this way: If you share in ways you are not supposed to, you are taking away the founder’s control of their raise process. No bueno, baby.
The Cultural POV on sharing individual deals:
Trusting Angels on our platform with a sharable deal link is a huge change from AngelList, where DO NOT SHARE is plastered across everything. My email is full of deal memos labeled THE MOST SUPER TOP SECRET CONFIDENTIAL DEAL EVER. …only to be followed up by another email ON THE SAME DEAL from a completely different source.
Oh please. Sometimes it feels like they are selling A16Z back deals on Amazon.
This notion of “exclusivity” has become less valid for pre-seed and seed-stage deals. This is great because the explosion of check writers (also great) has made early-stage fund-raisers feel a lot like a high-stakes game of Where’s Waldo for founders and funders (not great, that’s why Play Money is here). Exposure matters.
This is combined with increasing awareness among founders that having everyday angels on the cap table is wildly valuable for the capital, connections, and ‘optionality’ we provide. By optionality, I mean that Angels want a killer cash-on-cash return, and there are many paths to get to that. VCs? Well, things get more complicated if you get your company on the VC path if, at some point down the road, you are not perfectly suited for it.
Regardless of the changing early-stage funding options, momentum and FOMO still matter in fundraising. Sticking to the legal rules of what and where to share keeps the founder in control of that process.
We think our share link is the best of all worlds — the founder ultimately controls if the link is enabled, and they are deciding that based on expectation that it will shared within the legal bounds (culture), we screen all viewers for accredited investors status (legal), and we can use the power of the network to get the right deals in front of the highest quality most interested angels (Play Money Magic!),
And if you have ever shared a deal with a friend or a private community when you can say, “I am an investor, too.”… It’s amazing what happens. Social proof can accelerate your favorite founders more than you know.
The legal TLDR on sharing your overall activity on Play Money:
— coming next week along with referral rewards —
Extra Credit: The Legal Fine Print
There are three flavors of fundraising for private companies that determine what can or can’t be shared publically:
Right now, all the deals on Play Money are 506(b). We will likely support 506(c) deals in the future, especially as we work with more media-forward partners and as founders want to more actively bring their most loyal fans and customers into the fold.
506(b): This is typical VC stuff. it is only open to accredited investors. The company is allowed to take investors “at their word” that they are accredited, but in exchange, they are not allowed to solicit interest in their investments publicly.
506(c): VC funds do this, and some founders are starting to do it as part of “community rounds” after their main raise. The company has to audit and validate that their investors are accredited, but in exchange they can publicly share that they are raising money. My favorite company, Carry, is doing this right now.
RegCF: This is regulation crowdfunding. These raises can take money from everyone and they can talk about their raise anywhere — but there are other laws behind the scenes the company needs to comply with. For early-stage companies, there is often a stigma associated with RegCF. But it’s become a popular way for later-stage companies to raise “community rounds” that include their loyal customers in later-stage investment opportunities. Mercury Bank did this recently.
