Your company is invited by a local meetup group to present at demo day with other startups, and you accept. The group announces the demo day lineup of startups in an e-blast, on its website, on its Facebook page and through banner ads on a tech e-zine. On demo day, the room is packed and you nail your presentation. The following month, you close on an investment with a few angels who attended your demo day presentation. Have you just violated the securities laws?
For years, startups and emerging companies have been presenting at capital raising forums organized by accelerators, meetup groups, professional organizations and other similar groups and securing funding from investors they met at such events.
But the challenge for securities lawyers has been how issuers could do so without violating the ban on general solicitation in private offerings.
The ban on general solicitation in Reg D offerings is contained in Rule 502 of Reg D, which states explicitly that “neither the issuer nor any person acting on its behalf shall offer or sell the securities by any form of general solicitation or general advertising, including, but not limited to, the following:
- Any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio; and
- Any seminar or meeting whose attendees have been invited by any general solicitation or general advertising”
So if you stand on stage and pitch to a crowd, does that constitute a general solicitation? What about a YouTube clip of the pitch? What if your slides get posted on Twitter?
Now readers of this Blog and startup law nerds in general may be thinking: Didn’t the SEC adopt a demo day safe harbor rule a few years ago? Yes! Back in 2020, the SEC recognized this gray area when it adopted Rule 148 as part of its broader “harmonization” effort for exempt offerings. I blogged about it back then here https://www.nyventurehub.com/2020/12/22/demo-days-are-here-again-part-two-of-exempt-offering-amendments-deeper-dive/.
Rule 148 basically provides that communications made at certain events such as those sponsored by startup incubators, accelerators, institutions of higher education, government entities, nonprofits or angel investor groups will not be considered general solicitations, provided specific conditions are met. These include:
- No reference to a specific securities offering in event advertising.
- Sponsors must not offer investment advice, negotiate deals, charge attendance fees or receive compensation tied to introductions.
- Issuers may only share limited factual information about their offering (e.g., type and amount of securities, use of proceeds and unsubscribed amount).
- Virtual participation must be limited to members of the sponsor organization, accredited investors or those with relevant industry experience
Rule 148 gave startups and event organizers practical certainty, but only so long as the SEC doesn’t change its mind and reinterpret, amend or repeal the Rule.
Enter the Helping Angels Lead Our Startups (HALOS) Act of 2025, just passed by the House of Representatives on June 23, 2025, which would mostly codify Rule 148. The HALOS Act largely mirrors Rule 148 but elevates it to statutory law, reducing the risk that future regulatory shifts could undermine the safe harbor.
The HALOS Act also introduces a few notable modifications:
- One-page risk disclosure: Sponsors would be required to provide attendees with a concise summary of the event’s nature and the risks of investing in presenting issuers.
- Expanded sponsor categories: The Act explicitly includes venture forums and trade associations, and allows the SEC to designate additional sponsor types by rule.
- Clarification on religious venues: Events may not be held in religious facilities unless they are accredited institutions of higher education.
One other apparent difference between the Act and Rule 148 is worth noting. Rule 148 only applies if more than one issuer participates in the event. This was intended to prevent a promoter from holding an event that is essentially a sales pitch for one issuer’s offering while calling it a “demo day.” There is no similar requirement in the House’s version of the HALOS Act.
The HALOS Act reinforces and clarifies the compliance framework for startups and event sponsors participating in demo days under Rule 506(b). While Rule 148 already provides a regulatory exemption, codification through the HALOS Act offers greater legal certainty and may encourage broader participation in startup showcases.
That said, the Act does not alter the basic prohibition on general solicitation under Section 4(a)(2) or Rule 506(b). It simply defines a safe harbor for demo days that follow the rules. Lawyers should continue to advise clients to document event details, vet sponsors carefully and ensure all communications remain within the bounds of the exemption.
This is also not a free pass to advertise a private placement on TikTok. And the “reasonable belief” standard still applies: founders and sponsors must still exercise care about whom they invite and how they promote the event. Other antifraud provisions also still apply. Misstatements or omissions can still be actionable. And the entire offering still needs to comply with all other conditions of Reg D. One safe harbor doesn’t sanitize sloppy offering practices.
In the meantime, I’ll be keeping an eye on the HALOS Act as it moves to the Senate.
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