The short answer is no, you generally do not “register” a seed round in the same way a company registers for an IPO. However, you are almost always required to file a notice with the SEC to let them know you are using an “exemption” from registration.
Since $300,000 is a relatively small amount in the eyes of the SEC, you will likely use one of the “Safe Harbor” exemptions under Regulation D.
The “Form D” Filing
When you take seed money, you are selling “securities” (equity, SAFEs, or convertible notes). Instead of a full-blown registration (which costs millions), you file a Form D.
- Deadline: You must file this electronically via the SEC’s EDGAR system within 15 days of the first “sale” (usually when the first investor signs the agreement and sends money).
- Contents: It’s a short notice that includes the names of the company’s executives, the amount being raised, and which legal exemption you are claiming.
- State Level: You may also need to file “Blue Sky” notices in the state where your company is based and the states where your investors live.
Which “Rule” Should You Use?
Most startups at GonenCorp or similar entities choose between two main paths:
| Feature | Rule 506(b) | Rule 506(c) |
|---|---|---|
| Publicity | Strictly Private. You cannot post on social media or “blast” the deal publicly. | General Solicitation. You can tweet, post, and advertise the raise openly. |
| Investors | Unlimited “Accredited” investors + 35 “Sophisticated” non-accredited. | Accredited Investors ONLY. You must verify their income/net worth. |
| Verification | Investors can “self-certify” (check a box). | You must take “reasonable steps” (e.g., see tax returns or a CPA letter). |
[!IMPORTANT]
Accredited Investors generally mean individuals with a net worth over $1M (excluding their home) or an annual income over $200k ($300k with a spouse).
What Happens if You Don’t File?
If you skip the Form D filing or don’t follow the rules of your exemption:
- “Right of Rescission”: Investors can legally demand their money back, which can bankrupt a startup.
- Future Funding: Serious VC firms will audit your “Cap Table” during later rounds. If they see an illegal seed round, they likely won’t invest until it’s cleaned up.
- Fines: The SEC can impose civil penalties or bar you from raising money in the future.
Next Step: Since I’m an AI and not a lawyer, would you like me to help you draft a “Pitch Deck” outline or a Term Sheet summary that you can take to a securities attorney to make this official?