SEC STATEMENT OF POLICY REGARDING PROMOTERS’ EQUITY
Dated September 11, 2016
This statement of policy applies to all applications to register by coordination or by
This statement of policy does not apply to Tier 2 offerings of Section 17 CFR 230.251
through 230.263 of Regulation A under the Securities Act of 1933.
This statement of policy uses the following terms defined in the NASAA Statement of
Policy Regarding Corporate Securities Definitions:
Promoters’ Equity Investment
Promotional Or Development Stage Company
PROMOTERS’ EQUITY INVESTMENT
A. The Administrator may require a Promotional Or Development Stage Company
to demonstrate a Promoters’ Equity Investment equal to or greater than:
1. Seven percent (7%) of the aggregate offering amount, for offerings of up
to $1 million;
2. $70,000 plus two and one-half percent (2.5%) of the next $4 million of
the aggregate offering amount, for offerings of up to $5 million; or
3. $170,000 for offerings greater than $5 million.
B. The Administrator may accept any of the following as Promoters’ Equity
1. Accumulated earned surplus not paid out in dividends;
2. Goodwill, trademarks, intellectual property, copyrights and patents
developed by a Promoter and contributed to the issuer;
3. Documentation that specifies services rendered by a Promoter without
4. Documentation of any other non-cash contributions.
C. The Administrator may deny the registration of a public offering with inadequate
Promoters’ Equity Investment.