Supplement · Legal protocol · Filed by the Prospecto desk
The Protocol What this paper is, what it isn’t, and what a real one would need.
Not legal advice Written by the team from public SEC guidance, assuming U.S. law. Securities counsel must review the issuer, the instrument, the platform’s role and its fees before any real money moves.
Corrections & Clarifications Most pitches overstate something on page one. Here’s what this one doesn’t claim.
Units issued on Prospecto today are simulated . They’re bought with free demo credits and carry no legal ownership, cash value, redemption or dividends.
The estimate is a transparent heuristic with invented stage anchors, not an appraisal or investment advice.
Followers aren’t investors, and popularity isn’t value. Participation receipts are not equity or shares, and never convert into them.
I. Where the demo stands Prospecto at HackNC 2026 is a simulation . Nothing on these pages is an offer to sell, or a solicitation to buy, any security.
Property Demo state Why it matters Money Faucet-issued mock USDC on Solana Devnet; Nessie mock balances No investment of money, so no sale of a security Instrument Non-transferable Token-2022 participation receipts No resale, no secondary market, no synthetic exposure Rights None: no ownership, cash value, redemption, dividends or conversion Nothing for a buyer to profit from Companies Fictional fixtures in the public demo No real issuer is marketing a real offering Estimate Transparent heuristic with invented stage anchors Not an appraisal, not investment advice
II. What U.S. law actually says Accreditation depends on the offering route Investors don’t need to be accredited to buy stock that already trades on Nasdaq or NYSE. A private startup listed on a website is still a private offering , and who may buy depends on the exemption it uses.
Route Non-accredited buyers? Key conditions Reg CF Yes, within annual limits ≤ $5M per 12 months · one SEC-registered broker-dealer or funding portal · Form C disclosures · 1-year resale restriction Reg A, Tier 2 Yes, generally within limits ≤ $75M per 12 months · SEC qualification · audited financials · ongoing reporting Rule 506(b) Up to 35 sophisticated No general solicitation · extra disclosure to non-accredited buyersRule 506(c) No Public marketing allowed · every buyer accredited and verified
Publishing a valuation: the real rule It is a myth that a published valuation makes a startup’s shares unsellable. But SEC staff treat valuation opinions as outside “ordinary factual business information”. So a page saying “Startup A is worth $8M, invest in its round” can be general solicitation , with or without a buy button.
It can disqualify Rule 506(b) for that startup’s real raise. Under Reg CF, off-platform ads are limited to a short notice that points to the portal. Under 506(c) it’s allowed, but only for verified accredited buyers. Tokenization is not a loophole A token representing startup equity is still a security, and its sale and transfer need registration or an exemption. Calling it a token, making it non-transferable or labeling it “educational” doesn’t change the economic substance. Synthetic tokens tracking a startup’s value can also fall under security-based swap rules, which effectively bar retail buyers.
Two traps for a real-money Prospecto Funding portals may not give investment advice or recommendations. A platform-computed estimate beside a buy action can read as one.Matching buyers to issuers for a fee requires broker-dealer or funding-portal registration. Partner, don’t become one.III. How we’ll talk about it · planned, rolling out The demo still uses some offering-style words. Before any real company lists, the copy moves to this vocabulary.
Moving away from Moving to invest, investor back, backer, join the round shares, stock, equity, stake participation receipts, units valuation (beside a buy action) model estimate, demo estimate returns, upside, profit nothing about financial outcome
Planned: every buy or confirm screen will carry a Simulation, no real money stamp beside the action, not only in the footer.Already true: receipts never convert into equity. Prospecto is not a registered portal. A Nessie profile is not KYC. IV. Public-company demo profiles The demo uses public facts about real companies as unaffiliated examples . The companies and founders did not create or approve these profiles through Prospecto. Every price, balance, commitment and market move is simulated. No issuer receives money or creates rights through this demo. Before a startup controls its own listing, the experience remains clearly labeled as a simulation or waits for a regulated route. “It’s an unaffiliated product simulation using public company facts. No money moves, no issuer is raising here, and no participant receives ownership or financial rights.” V. Path to a real version · roadmap, not current behavior Step Decision 1 · Issuer Only incorporated startups with standard instruments (e.g. a crowdfunding SAFE or common stock) 2 · Route Reg CF via an existing registered funding portal or broker-dealer. Prospecto is the software and analytics layer 3 · Estimate The founder sets and owns the price. The model is a disclosed tool with formula, inputs and version shown 4 · Off-platform “Back us” links follow Reg CF advertising limits and point to the portal 5 · Limits & identity Annual limits and KYC/AML enforced by the intermediary 6 · Funds Held in the intermediary’s escrow or by a qualified third party. Portals may not hold investor funds 7 · Tokens Optional ownership record and transfer lock for legally issued securities, never a route around registration 8 · Out of scope Secondary trading, order books, AMMs, leverage, synthetic exposure 9 · Gate Counsel signs off before mainnet or any real money
VI. Sources