Why can I only reserve shares for some companies?

What is Testing the Waters?

Some companies looking to raise money through Regulation A+ choose to Test the Waters for a period of time and gauge the interest of the crowd before filing with the SEC. When a company does this, you will have an opportunity to “reserve shares” on the StartEngine website. If you choose to participate at this stage, you are simply expressing interest in investing with no obligation of investing when it goes into Live Offering mode. There is no commitment between the reservation holders and their investment during Test the Waters.


If I indicate my interest (reserve shares), will I be required to pay that amount? 

No. In a test-the-waters campaign, indications of interest are not binding. A reservation is different than an investment. There is no commitment between reservation holders and their investment during the Test the Waters phase of a campaign.

The company is not yet offering shares and there is no obligation for the reservation holders to invest.   Likewise, the company is not eventually obligated to offer shares to anyone who has indicated interest. All that said, potential investors should try to be accurate with their indications of interest, knowing that the company is making an important decision based on this data. Companies should also make every attempt to allow those who indicated interest to participate in the potential future offering of shares.


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