Legally Presenting Your Investment Deal: What You Can And Can’t Say

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by PPM LAWYERS
Legally Presenting Your Investment Deal: What You Can And Can’t Say

Before you pitch investors, make sure your words won’t get you in legal trouble. Here’s how to present your deal the right way.

When it comes to raising capital, how you present your investment deal matters just as much as what you’re offering. One wrong word—or even a too-aggressive marketing tactic—can land you in hot water with the SEC.

In the world of private placements and Regulation D offerings, there are strict rules around what you can say, how you say it, and to whom. These laws are designed to protect investors—but they also protect you, the issuer, if followed correctly.

This post breaks down the key do’s and don’ts of legally presenting your deal so you can avoid costly mistakes and build investor trust from the start.

1. Understanding General Solicitation And When It’s Allowed

The first legal boundary most issuers encounter is the restriction on general solicitation.

What Is General Solicitation?

It refers to broadly advertising your investment opportunity to the public—through social media, email blasts, webinars, websites, podcasts, or any platform where you’re promoting to people you don’t have a pre-existing relationship with.

When It’s Not Allowed:

If you’re using Rule 506(b) of Regulation D, general solicitation is prohibited. You can only present your deal to investors with whom you have a pre-existing, substantive relationship.

When It Is Allowed:

If you’re using Rule 506(c), general solicitation is allowed, but you must:

  • Limit your offering to accredited investors only, and
  • Take reasonable steps to verify their accreditation status (not just self-certification)

Tip:

Many issuers accidentally engage in general solicitation without realizing it. Even talking about your raise on LinkedIn could trigger this issue if you’re under 506(b).

2. What You Can Legally Say In A Deal Presentation

When you’re sitting down with potential investors—or pitching at a private event—you must ensure everything you say is accurate, balanced, and backed up.

✅ Legal, Smart Things to Include:

  • Your business model and investment strategy
  • The structure of the deal (LLC, LP, fund, etc.)
  • Financial projections (with disclaimers)
  • Use of proceeds
  • Sponsor team bios and track record
  • Exit strategy

Be transparent and avoid exaggeration. Use terms like “targeted returns” rather than “guaranteed profits.”

Required Disclaimer Language:

When including projections or forward-looking statements, always include disclaimers like:

“These projections are based on assumptions and are not guarantees of future performance. Investing in securities involves risk, including the potential loss of principal.”

3. What You Should Never Say When Pitching Investors

Securities laws are designed to prevent fraud and misrepresentation. Here are some of the most common verbal missteps to avoid:

❌ Illegal or Risky Claims:

  • “This investment is safe.”
  • “You can’t lose money.”
  • “It’s a guaranteed return.”
  • “You should get in now before the SEC shuts it down.”
  • “We’ve done this before and it always works.”

Even if you believe what you’re saying, that doesn’t make it legal. Overpromising or omitting important risks can lead to claims of fraud or misrepresentation.

4. Pitch Decks And PPMs: Aligning Your Messaging

Your pitch materials should be legally aligned with your Private Placement Memorandum (PPM). That means:

  • Consistency between projected returns in your deck and PPM
  • Matching risk disclosures
  • Identical language on investment terms and fees

If there are discrepancies, regulators—and investors—may view that as misleading.

Tip:

Work with a securities lawyer to review your pitch deck and investor presentation materials. It’s common for well-meaning sponsors to oversell in a deck while the PPM tells a different story.

5. Creating A Legal Investor Presentation Process

How you deliver your pitch is just as important as what’s in it. Here’s how to structure your investor conversations legally:

Step-by-Step:

  1. Initial Outreach: If using 506(b), only contact people you know or who have been pre-vetted via an investor questionnaire.
  2. Educational Phase: Let investors learn about your strategy before presenting active offerings.
  3. Presentation Delivery: Use a clear, compliant deck or overview, backed by a signed NDA if needed.
  4. Provide the PPM: Ensure every investor receives and reviews the PPM before committing funds.
  5. Document Everything: Keep records of who saw what, and when.

Bonus Tip:

Record webinars or presentations—just for internal documentation. If an issue arises later, you’ll have proof of what was said.

Conclusion: Say The Right Things, The Right Way

Presenting your investment deal isn’t just about persuasion—it’s about protection. Protecting your investors, your company, and your future fundraising ability depends on doing it right.

Stay within the lines of securities law, present your offer honestly, and align your pitch materials with your legal documents. When in doubt, get your materials reviewed by a professional who understands Regulation D and private placements.

With the right structure and messaging, your pitch can build both compliance and confidence—setting the stage for a successful capital raise.

Book a Free Strategy Call to Get Your Legal Docs in Place