Most founders think a financial promotion is a formal document. It isn't. Section 21 of FSMA catches any invitation or inducement to engage in investment activity — and that is a far wider net than a pitch deck.
Things that are financial promotions and don't look like it
- A LinkedIn post saying your round is open
- A WhatsApp message to a contact saying "we're raising, want in?"
- A newsletter mentioning your valuation
- A slide at a demo day with your raise terms on it
- An automated email sequence to anyone who downloaded your deck
If it invites someone to invest, or nudges them towards it, it is a promotion. The medium is irrelevant.
Why founders get caught
The rule most people miss is that the restriction applies to communication, not to the company's status. You do not need to be a financial services firm to breach it. A founder emailing their address book about an open round is making a financial promotion, and unless it is approved by an authorised person or falls within an exemption, that is an offence.
The exemptions are not loopholes. They are a design specification for how you run a raise.
What the exemptions actually require
The routes most private raises rely on — certified high net worth individuals and self certified sophisticated investors — were tightened in January 2024. Since then the requirements are unambiguous:
- The prescribed statement must be used verbatim, not paraphrased
- The investor must complete it personally, not have it ticked on their behalf
- It must be dated and recorded, and it expires after twelve months
- Risk warnings must be given due prominence, not buried in a footer
A banner on a website saying "I confirm I am a sophisticated investor" does not meet this standard. It never really did.
The practical fix
Split your content into two tiers before you write a word of it. Public tier content describes your company, market and technology, and contains no invitation to invest and no reference to terms. Promotion tier content — anything about the round, the valuation, the instrument — exists only behind a completed certification.
Build the gate first. Then write the campaign. Doing it the other way round is how founders end up deleting six months of content.
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