Startups have more options than ever to raise capital. Thanks to the JOBS Act, early-stage companies can solicit investments in public, which makes the Internet an incredibly powerful tool for connecting startups with investors. Naturally, an ecosystem of funding websites has grown, but this landscape is fraught with peril.

Many of these funding platforms provide tools for startups to market their offerings publicly, but these sites operate in a gray area, either handling the capital fundraising process incorrectly, or in ways that are not feasible in the long run.

It’s dangerous to conduct a general solicitation round without a strong legal team handling the process. A company has to navigate complex regulations to do it right. An improper capital raise might result in a rescission right to investors, with terrible consequences.

A startup might hit a rough patch (as they often do), and if that happens, an investor could take advantage of the uncertainty and claim that the company didn’t follow securities rules, forcing the company to return capital.

That could crater a company.

Because of the pitfalls, general solicitation 506(c) offerings have gotten a bad rap. When it comes to fundraising, other platforms say, “Don’t ask for permission, ask for forgiveness.” This is a dangerous way to conduct a securities offering. FlashFunders takes a different approach.

We started as a group of securities lawyers, venture capitalists, investment bankers, and SEC/FINRA experts with a vision to do general solicitation the right way. We created a safe and streamlined platform for startups.

Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) rules are complex. We want to go through the regulatory front door, so we spent 10 months collaborating with FINRA to formulate strong processes for due diligence, accredited investor verification, escrow, and countless other nuances.

We launched FlashFunders once we were 100% sure our companies conduct securities offerings safely. In late 2014 we became the first broker-dealer approved by FINRA to operate a general solicitation platform online.

Other platforms cut corners. We built the industry standard, creating THE correct path to capital formation.