Frequently Asked Questions​

Offerings on Propel(x) are conducted under Regulation D, promulgated under the Securities and Exchange Act of 1933, as amended. Regulation D governs private placement exemptions, to allow companies to raise capital through the sale of equity or debt securities without having to register their securities with the SEC.

We work with startups that make use of either Rule 506(b) or Rule 506(c) exemptions. See https://www.sec.gov/answers/rule506.htm for more detail.

Under Rule 506(b):

• A company cannot use general solicitation or advertising to market the investment.
• A company may sell its securities to an unlimited number of “accredited investors” and up to thirty five non-accredited investors who meet sophistication requirements.
• Self-certification of accredited investor status via a questionnaire is used in general, as the 506(b) exemption does not specify an accreditation process to verify the Investor’s accreditation status.

Under Rule 506(c):

• A company CAN use general solicitation and advertising to market the investment (i.e., visitors to the Propel(x) landing page can view high-level information about the offering without needing to sign up or sign in)
• However, all purchasers in the offering must undergo additional steps to verify their accredited investor status (i.e., providing W-2s, tax returns, bank and brokerage statements, credit reports, etc.) before making an investment

Entrepreneurs begin the process via the List a Startup link from the main navigation bar of our home page and follow 3 simple steps:

1. Apply to List: Apply to list your company on Propel(x). Our team will contact you if we have any questions as we review your application. Once our review is complete, our team will make a decision whether or not to list the company.
2. Sign up for a Propel(x) startup account: If you register via LinkedIn, you can immediately begin the listing process. You will need to verify your email address first if you register with email.
3. Complete your company information: Enter the name of your company, and proceed filling in basic information like the company logo, website, location, and team members. This is also where we ask you about your deep technology, accelerator affiliations, and previous fundraising. 
4. Complete your deal profile: Once you have completed all required fields, a fundraising tab will become unlocked for you to add a new deal. Enter the name of your new round and proceed to uploading deal-specific details such as your pitch text, pitch deck, deal documents, and terms. You can click the ‘Investor View’ button to preview how your deal profile will appear to Propel(x) users. Note that the key company information (e.g., company logo and team members) you have previously filled out will also be used to populate the deal profile. Once you are happy with your deal profile, click “Submit for Review.” You will be notified on screen of any missing required information. You must complete those fields before your can submit again.

Make adjustments: the deal profiles are reviewed by Propel(x) and Hubble Investments, our broker-dealer affiliate. We will need you to address any feedback before we can approve your deal for publication.

Propel(x) uses a rigorous screening process when deciding which companies are invited to list on the platform. Once we receive your deal profile submission, we will carefully review your company information (team, description of the technology etc.) and deal specifics (pitch, terms, supporting documents, etc.) against the below – and other additional – criteria.

• Your startup falls within the realm of ‘deep technology’ – which we define as companies founded on a scientific discovery or meaningful engineering innovation.
• Your startup is a C-Corp or an equivalent organization status in any country of incorporation.
• Your startup has outright ownership of the IP or an exclusive worldwide license for the IP in case the IP is owned by a 3rd party.
• Your startup has a prototype or significant experimental data to support the scientific/technological core of the company.
• Your startup has a full-time CEO.
• Your startup is connected to reputable incubators, research institutions, national labs or other networks that will give startups the support system and networks to succeed.
• Neither your startup nor any of its officers, directors, or any covered person is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act.
• Your startup has never been party to any legal disputes.

Propel(x) will contact you should we have any additional questions during our review.

Propel(x) charges a 5% success fee for companies that raise greater than $200,000 through the platform. For companies that raise less than $200,000, Propel(x) will charge an 8% success fee.

Yes. Once our team has approved your deal profile for publication, you can update your company information as the situation arises. For example, investors want to know if you hire a new CTO during your fundraise. Most deal-specific information can also be updated (e.g., you can upload a revised pitch deck, add a new webcast, or reschedule an event).

Please be aware, however, that all changes to your deal profile or documents need to be approved by Hubble Investments, our broker-dealer affiliate. Therefore, changes cannot be directly made through your Propel(x) Startup account but need to be requested. Please contact your deal manager if you want to make a change to your profile.

All updates after your deal becomes live will be captured in an activity log visible to all investors visiting your deal profile. While new information is always of interest to investors, frequent changes to key information can lead to confusion and are not advised.

Only one live deal is allowed per startup at any given time. You can start a new round from the Fundraising tab once your current round closes.

Yes, each Entrepreneur User can list multiple startups.

Only accredited investors that are registered at Propel(x) will have access to your deal profile. Propel(x) restricts the access to the documents and webcasts that you have uploaded and to the evaluation information. We will ask you to approve the investors that want access to the restricted deal content.

Generally, indemnification provisions in contracts are typical and provide that if one party breaches the agreement or engages in negligent or willful misconduct related to the relationship, that breaching party will compensate the non-breaching party for the damages caused. For example, if a company raising money on Propel(x) misappropriated a third party’s trademark and posted it on Propel(x) and that third party sued Propel(x), the company would have to defend Propel(x) and pay any damages as a result.

We make extra efforts to protect startups’ information.

Startups information (presentations, investor calls, all other documents) are privileged access. Startups can approve or reject investor access.

Under Regulation D, an issuer is obligated to have a reasonable belief, to take reasonable steps to verify, that an investor is an accredited investor. So long as those items are satisfied at the time of the sale, then subsequent proof that the investor is actually not an accredited investor will not cause a securities violation.

Propel(x) will work with you to reach a mutually agreeable solution. We will generally ask that you allow those investors who have already committed to invest to participate, but we may agree to give up any remaining allocation to outside investors.