Investment Process #

Step 1: Investment Amount Selection #

The investor begins by specifying the amount they wish to invest. The platform provides a range of possible amounts with guidance or minimum requirements for each type of investment. If the investment falls under Regulation D ( Reg D) exemptions, the platform ensures compliance with the applicable limits—such as a $5M cap for Rule 504 offerings and an unlimited amount for 506(b) and 506(c) offerings. (Learn more about Reg D)

Step 2: Investment Profile Selection #

After selecting an investment amount, the investor chooses an investment profile. To ensure compliance throughout the investment process, the platform will verify that the chosen profile matches the necessary accreditation status. Accreditation verification under Reg D 506(c) requires steps such as income verification, tax returns, brokerage statements, or CPA attestation, while Reg D 506(b) allows self-certification. (More on Reg D 506(b) & 506(c))

The platform is required under SEC Customer Identification Program (CIP) Rules to collect an investor’s name, date of birth, address, and identification numbers (encrypted) before processing investment under new investment profile. (Read more about CIP requirements). Therefore, KYC/ AML checks must be initiated before any investment can proceed beyond a CONFIRMED status and must be fully completed before transitioning to a LEGALLY CONFIRMED status. These requirements align with the USA PATRIOT Act and Bank Secrecy Act (BSA). (Learn more about BSA)

Step 3: Agreement e-Signature #

The investor reviews the investment agreement terms and then digitally signs the document to formalize their commitment. The platform securely tracks and stores the signed document for future reference. Investors can access and review the document at any time.

In accordance with SEC Rule 17a-4(f) under the Securities Exchange Act, the platform ensures that investors can access their signed investment agreements for at least five years. ( SEC Rule 17a-4 details) Additionally, FINRA Rule 4511 applies to electronic recordkeeping, ensuring compliance with FINRA’s supervision standards. ( More on FINRA Rule 4511)

Step 4: Payment Method Selection #

Once the agreement is signed, the investor proceeds to the payment step, selecting from ACH transfer, Electronic Wallet (e.g., Dwolla), or WIRE transfer. The available payment methods depend on the selected investment profile. In compliance with FINRA and SEC cybersecurity guidelines, the platform follows NIST 800-63B standards for data handling. ( View NIST 800-63B standards) To protect investor data and minimize liability:

No sensitive financial data is stored on the platform.
Payment processing is managed by PCI DSS-compliant third-party providers. ( More on PCI DSS)
ACH and WIRE transfers comply with Bank Secrecy Act (BSA) and FFIEC cybersecurity guidelines. ( FFIEC security standards)

Step 5: Review & Confirm #

Once the payment information is submitted, the investor receives a summary of their investment details for final review. This includes the investment amount, selected profile, signed agreement, and chosen payment method. Investors can adjust or cancel before final submission.

Under SEC Rule 10b-10, the platform ensures:

A confirmation of the investment details is sent at or before completion. ( SEC Rule 10b-10)
Disclosure of any compensation the platform receives.
Immediate email confirmation of the finalized investment.

Compliance with FINRA Rule 2269, requiring disclosure of any financial interest the platform has in the investment. (More on FINRA Rule 2269)

Post-Step: KYC & Accreditation Verification #

The investor’s KYC and accreditation status are verified by a third-party provider specializing in identity verification.

If Reg D applies, funds must be protected in escrow per SEC Rule 15c2-4 ( Escrow Rule 15c2-4):

Escrow ensures secure fund management during the campaign.
Funds are only released upon successful closing of the offering.
Escrow also covers pre-closing situations such as offer cancellation, early closing, material changes, or unsuccessful offerings.

Upon successful accreditation, the platform sends:

A formal email notification (mandatory per SEC regulations).
An in-app notification as an additional measure to ensure investor awareness.

Security & Compliance in Communication #

The platform integrates with a trusted third-party email service to ensure compliance with FINRA Rule 3110 (supervision of electronic communications). ( More on FINRA Rule 3110)

By ensuring adherence to SEC, FINRA, NIST, and AML/KYC standards, the platform demonstrates its commitment to investor protection, data security, and regulatory compliance at every stage of the investment process.

Emails #

investment/confirmed.pug - Required by law/SEC
profile/accreditation/approved.pug - Required by law/SEC

flowchart TD A[User starts investment] --> B(Investment Amount Selection) B --> C(Investment Profile Selection) C --> D(Agreement e-Signature) D --> E(Payment Method Selection) E --> F(Review and Confirm) F --> G([LAW REQUIRED EMAIL : CONFIRMED INVESTMENT]) F --> H{{Identity Verification}} F --> I{{Accreditation Verification}} K --> P([LAW REQUIRED EMAIL : APPROVED ACCREDITATION]) I --> K{Approved?} H --> K K -->|No| L{{Investment Cancellation}} K -->|Yes| M(LEGALLY CONFIRMED INVESTMENT) M --> N(Payment process is initiated) N --> L N --> O[Investment Finalization]

Notice: Provider Variability and Compliance Assurance

Please be advised that, depending on customer preferences, the specific 3rd party providers involved in the investment and related processes, including identity verification, accreditation checks, electronic wallet provision, email communications, and other related services, may vary. However, rest assured that all such providers are carefully selected to meet the highest standards of security, compliance with applicable laws and regulations, and user experience best practices.

Each provider undergoes a rigorous vetting process to ensure they align with our commitment to safeguarding your personal and financial information. We prioritize full adherence to regulatory requirements, ensuring that your investment experience remains secure, compliant, and seamless.

Test Cases

All processes on our platform are thoroughly documented, including detailed test cases, which are especially critical whenever changes are made. Test cases ensure that every feature functions as intended, identify potential issues early, and maintain the platform’s reliability, security, and compliance for our investors.

Related Use-Cases: