How can I pitch without a general solicitation?

The redacted email below was sent to the Cornell NYC/ tri-state community – thousands of people.

Conveniently, it’s not automatically a securities law violation any more, but this is definitely how to be sure you’ve fallen under the new general solicitation rules, which require a company to take “reasonable steps” to verify that each investor is in fact accredited — that means that a representation from the investor is no longer sufficient.

I am a graduate of Arts ’82, currently starting a technology venture. I don’t want to post details here, but you can get a hint at [startup website URL was here]  (it’s just a landing page, not much info, but it suggests what I’m up to.)  I am seeking Angel funding.  If you are an angel funder, or can steer me to someone who is, please contact me at [founder email]  
Thanks in advance for all replies.  [Founder name].

What should this founder have done? How do you let people know without triggering a general solicitation?

The technique I pass on to my startup clients is to simply tell people what you’re doing. Those who are already investors know what trigger words indicate that you’re probably looking for money. If they have an interest, they know how to follow up.

Revised:

I am a graduate of Arts ’82, currently starting a technology venture. I’ve created a landing page with some basic info here. I’m looking to expand and grow to the next level. Please take a look, and if you have thoughts on how I might grow, you can reach me at founder@startup.com.

Nearly the same email, but you’re not directly asking for investors to take a look. It’s oblique — those to whom your message is really directed know what you’re talking about. And, they can self-select based on industry and stage of growth if you give them some basic information, like:

I’m Joe Founder. I’ve developed patent-pending intellectual property to help match your socks to your shoes. I’ve got three employees and we are three months into our private beta.

This sample language isn’t about investment — it’s about the business. “Sell the sizzle, not the steak.”

Some might argue that you’re going to surely use only accredited investors, but that’s probably not true if you’re the founder of an early stage startup and are sending out your own fundraising emails. My response: don’t create obligations and requirements — and in this case, securities law liabilities — that you don’t have to.

For this approach to make sense, you’d have to believe that your best chance at finding an investor is finding someone who doesn’t already know how to read between the lines and figure out that you might be looking for money. Every startup is looking for money: it’s axiomatic. There’s always expansion to be done. Almost no one is bringing in so much money that they don’t need any more (probably craigslist.org, though).

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