Can You Use Financial Projections in a Crowdfunding Offering? Reg CF, Reg D and Reg A+

Financial projections are permitted in a securities offering, but the protection you get for them depends entirely on which exemption you are using — and only Regulation A offerings are named in the SEC's forward-looking statement safe harbor. Under Rule 175, a forward-looking statement made in a Regulation A offering statement, solicitation-of-interest document, written document or broadcast script is deemed not to be a fraudulent statement unless it was made without a reasonable basis or disclosed other than in good faith; Regulation Crowdfunding and Regulation D materials are not listed in that rule.

The question is almost never "am I allowed to publish a forecast" — it is "what happens if the forecast is wrong." A documented projection in a Reg-A+ offering circular sits in a different legal position than the same number in a Reg-CF ad headline.

What Counts as a Forward-Looking Statement

Rule 175(c) defines the term narrowly, which is useful because it says exactly what the regime covers: a projection of revenues, income or loss, earnings or loss per share, capital expenditures, dividends, capital structure or other financial items; management's plans and objectives for future operations; a statement of future economic performance in management's discussion and analysis; and the disclosed assumptions underlying any of those.

Two consequences follow. "We plan to open four locations in 2027" is a forward-looking statement in the same way a revenue table is. And the assumptions are part of the statement — so an issuer that publishes a number without publishing what it rests on gives up the more defensible half of the disclosure.

Which Exemptions the Safe Harbor Reaches

Rule 175(b)(1) applies to forward-looking statements in documents filed with the Commission, but the proviso does the work. For an issuer not already subject to Exchange Act reporting under Section 13(a) or 15(d) — almost every first-time issuer — the statement must appear in a Securities Act registration statement, or in an offering statement, solicitation of interest, written document or broadcast script under Regulation A.

The Reg-CF line deserves a caveat: Rule 175 predates Regulation Crowdfunding and has not been amended to name it, so the safe harbor question for a Form C is a matter of reading rather than settled practice, and counsel should evaluate it on the facts. What is not ambiguous is the floor underneath every exemption — the antifraud provisions reach any statement made in the offer or sale of a security, covered in our breakdown of who is liable if your crowdfunding pitch is wrong.

The SEC's Format Guidance on Projections

The Commission's own view of how projections should be built lives in Item 10(b) of Regulation S-K (17 CFR 229.10), which states that the Commission encourages management's projections of future economic performance that have a reasonable basis and are presented in an appropriate format, in the documents specified in Rule 175. It binds registrants in Commission filings; outside that perimeter it is the benchmark practitioners work to, because it is the clearest published statement of what "defensible" looks like.

1. Reasonable basis, not track record. Item 10(b)(1) states management must have a reasonable basis for its assessment, while expressly rejecting the idea that an issuer must always have an operating history or prior projecting experience to have one. Pre-revenue issuers are not disqualified — they are held to whether the assumptions hold up.
2. Outside review is optional and carries its own disclosure. A review may furnish additional support, but if a report of it appears in a Commission filing the guidance calls for disclosing the reviewer's qualifications, the extent of the review and their relationship to the issuer.
3. No selective projection. The choice of items projected should not be susceptible of misleading inferences through selective projection of only favorable items. Revenue, net income or loss, and earnings or loss per share are usually presented together, and Item 10(b)(2)(i) states it generally would be misleading to present revenue projections without one of those income measures.
4. Pick a period you can defend, and state a probable amount or reasonable range. A two- or three-year projection may be entirely reasonable for some companies; others may have no reasonable basis beyond the current year. Ranges should not be so wide as to make the disclosure meaningless, and several projections based on varying assumptions are permitted.
5. Separate modeled figures from historical ones, and explain any non-GAAP measure. Projections not based on historical results should be clearly distinguished from those that are, and it generally would be misleading to present projections built on historical results without giving those results equal or greater prominence. A non-GAAP measure should be defined and reconciled to the most directly comparable GAAP measure.

The prominence rule is the one that most often breaks campaign creative: a landing page leading with a projected 2029 revenue figure while the audited historicals sit three clicks deep in the data room is exactly the presentation the guidance calls misleading — however responsibly the projection was built.

Where Projections May and May Not Appear in Marketing

The filed document is only one surface. The advertising rules are separate — and for Reg-CF, considerably more restrictive than most founders expect.

Regulation Crowdfunding: the notice is a closed list

Rule 204 prohibits an issuer from advertising the terms of a Reg-CF offering except through a notice that directs investors to the intermediary's platform and includes no more than three categories of information: a statement that the issuer is conducting a Section 4(a)(6) offering with the intermediary's name and a link to the platform; the terms of the offering; and factual identity information — name, address, phone number, website, an email address for a representative, and a brief description of the business.

Rule 204(e) defines "terms of the offering" as the amount of securities offered, their nature, the price, the closing date, the planned use of proceeds and progress toward the funding target. A financial projection is not among them. In practice, paid social creative, display ads and email subject lines for a Reg-CF campaign carry no forecasts at all — the forward-looking material lives in the Form C and, under Rule 204(c), in communications through the channels the intermediary provides, where the issuer must identify itself and anyone acting on its behalf must disclose that affiliation.

Regulation A+: testing the waters carries a correction duty

Rule 255 permits an issuer to gauge interest at any time before qualification, including before the offering statement is filed, and states plainly that such communications are deemed an offer of a security for purposes of the antifraud provisions. Materials must carry the prescribed legends: no money is being solicited and will not be accepted if sent, no offer to buy can be accepted before qualification, and an indication of interest involves no obligation of any kind.

Rule 255(d) adds the obligation that catches marketing teams. If solicitation-of-interest materials are used after the public filing of the offering statement and are inaccurate or inadequate in any material respect, revised materials must be redistributed in substantially the same manner as the originals. A projection in a testing-the-waters asset is therefore a standing commitment: if it becomes materially wrong while the campaign is live, the correction has to reach the same audience through the same channels.

Regulation D 506(c): public reach, no filed backstop

A 506(c) issuer may solicit publicly, which makes projections tempting in paid media. No filed offering document anchors the claim and no rule-based safe harbor applies, so every forecast in an ad is measured against the antifraud standard alone. The control is documentary: the assumptions file, the version history of the creative, and the ability to show what was known when the claim ran.

A Practical Discipline for Projection Disclosure

1. Keep a dated assumptions memo for every projected line item, with the source of each input and who approved it. Rule 175(c)(4) treats disclosed assumptions as part of the forward-looking statement, so this file is both the basis and the disclosure.
2. Present revenue alongside an income measure, give historicals at least equal prominence wherever the projection is built on them, and cap the projection period at the horizon the assumptions support.
3. Map every campaign claim back to a line in the filed document. Anything in an ad that cannot be traced to the Form C, offering circular or PPM is better removed before launch than defended afterward.
4. Set a re-review trigger — a material change in assumptions, a missed milestone, a financing event — and decide in advance who calls whether creative is corrected or pulled. For Reg-A+ testing the waters, log distribution by channel so a Rule 255(d) redistribution is executable.

Valuation deserves the same treatment, because a price is a forward-looking claim wearing a present-tense number, examined the same way — covered in how to set valuation for an equity crowdfunding raise.

Frequently Asked Questions

Can a pre-revenue startup publish financial projections in an offering?

Yes. Item 10(b)(1) of Regulation S-K expressly rejects the position that an issuer must have an operating history or prior projecting experience in order to have a reasonable basis. The test is whether the assumptions behind the numbers are reasonable and disclosed, not whether the company has a track record. Pre-revenue issuers carry a heavier burden of explaining the assumption set, because there is no history to check it against.

Does the Rule 175 safe harbor cover Regulation Crowdfunding offerings?

Rule 175 does not name Regulation Crowdfunding. For an issuer not subject to Exchange Act reporting, the rule's proviso requires the statement to appear in a Securities Act registration statement or in a Regulation A offering statement, solicitation of interest, written document or broadcast script — and a Form C is none of those. Issuers should ask counsel how the rule applies to their facts rather than assuming protection either way; the antifraud provisions apply regardless.

Can you put a projected return or IRR in a Reg-CF advertisement?

Rule 204 limits a Reg-CF notice to a closed list, and Rule 204(e) defines the permitted "terms of the offering" as the amount and nature of the securities, the price, the closing date, the planned use of proceeds and progress toward the funding target. A projected return is not on that list. Forward-looking material typically stays in the Form C and in the intermediary's communication channels, where Rule 204(c) requires the issuer and anyone acting on its behalf to identify themselves.

What happens if a company misses the projections it published?

Missing a projection is not by itself a violation. Rule 175 frames the question as whether the statement was made or reaffirmed without a reasonable basis or disclosed other than in good faith — measured when the statement was made, not with hindsight. That is why the contemporaneous assumptions file matters more than the accuracy of the forecast.

Must Reg-A testing-the-waters materials be corrected if a projection changes?

Under Rule 255(d), solicitation-of-interest materials used after the public filing of the offering statement that are inaccurate or inadequate in any material respect must be redistributed in revised form, in substantially the same manner as the originals. A limited exception applies where the only defective information sits in a Preliminary Offering Circular provided by reference or URL.

Building Campaign Creative That Matches the Filed Document

The compliance failure in most raises is not a fabricated projection. It is a filed document drafted carefully and a marketing layer drafted separately — different writers, different review, different vocabulary — until the ad promises something the offering circular never said. That gap closes when the creative is built from the filed document rather than in parallel with it.

Growth Turbine has provided marketing support across more than $490M in aggregate issuer-reported totals, with 200+ campaigns supported across Reg-CF, Reg-D 506(c), Reg-A+ and tokenized securities offerings, on 23+ crowdfunding platforms and across 25+ industries. That work runs on one rule: every claim in the funnel traces to a line in the filed document. To build the campaign to that standard, start with our equity crowdfunding marketing services, or see how Reg-A+ campaigns handle testing the waters before qualification. To discuss a specific offering, get in touch.

Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute legal, financial, or investment advice. Always consult with qualified legal counsel and financial advisors before launching a capital raise.