Frequently Asked Questions

Invest Local Florida is StateCF's marketplace for Florida companies raising capital from Florida residents under Chapter 517, Florida Statutes: the Invest Local Exemption (§ 517.0612) and the Florida Limited Offering Exemption (§ 517.0611). StateCF is the OFR-registered intermediary that runs the portal and keeps the record. Registration does not imply that such person has been sponsored, recommended, or approved by the state or an agency or officer of the state or by the United States or an agency or officer of the United States.

No. StateCF is an intermediary. It does not recommend securities, give investment advice, solicit investors, or vouch for any company. Every offering is made by the company on its own behalf.

StateCF does not solicit investors. We never reach out to investors or ask anyone to invest. An investor who comes to this site does so on their own or through a company's own communications about its offering, never through a solicitation by StateCF.

Florida residents only. Every investor confirms residency and completes investor education before subscribing. A non-resident purchaser would defeat the exemption for the whole offering.

Florida law (§ 517.0612(6)) limits a company to $10,000 from any one purchaser in its Invest Local offering, unless the purchaser is an accredited investor, an officer, director, partner or trustee of the company, or an owner of 10% or more of it. A spouse, child or relative living in the same home, and companies they own more than half of, count as one purchaser. StateCF policy is stricter than the law: until StateCF has verified that you are accredited, you may commit no more than $10,000 in total across all offerings in any 12 months, including what you tell us you invested on other Florida portals. You confirm those amounts at checkout.

To the Florida bank or depository named in the company's disclosure, never to StateCF. Funds stay there until the company's target is met, then move by ACH to the company. If the offering does not close, the depository returns the funds.

Yes. There is a 48-hour cooling-off window after you sign, and Invest Local sales are voidable for three days after first tender under § 517.0612(12). If the issuer makes a material change you are asked to reconfirm.

For six months from the date the company sells them to you, the shares may be resold only to Florida residents (SEC Rule 147(e) and Rule 147A(e)). After that, resale may still be restricted by contract, and there may be no market. Be prepared to hold indefinitely.

1. Create an investor account and confirm your Florida residency, including your Florida ZIP code. 2. Read and accept the Investor Education document. 3. Open an offering's presentation room: the business, its officers and directors, its financial statements, the terms, and the documents it filed with the OFR. Ask questions in the discussion or at a live conference. 4. Subscribe through the two-screen checkout: confirm how much you have invested in the last 12 months, choose your shares, read the certifications and sign electronically. 5. Pay the company, through the Florida bank or depository named in its disclosure. StateCF never receives your money. 6. You may cancel at any time before you pay, and for three days after you first pay (§ 517.0612(12)). StateCF emails you the deadline. 7. Your account keeps the subscription, its status, your certificate and the company's notices.

An offering has a minimum target. Your money waits in the company's named Florida account until the target is met; only then can it be released to the company. If the target is not met by the deadline — for an Invest Local offering, within 180 days of opening — the offering closes and every investor is refunded in full.

Offerings on StateCF are common stock, preferred stock or debt. The share class and its rights are set out in each company's offering materials; read them before you subscribe. Common stock is the simplest form of ownership, the kind most often held by founders and employees. Common shareholders usually have voting rights, though these can be limited, and in a sale or wind-down they are paid only after the company's lenders and any preferred shareholders. Preferred stock is usually issued to outside investors. It can carry rights common stock does not — protection against some dilution, or a priority when the company is sold. Which rights it carries depends entirely on the terms of that offering. Debt is a loan to the company, repaid on the terms stated, with interest where the terms provide for it. Lenders are paid before shareholders, but a company that cannot pay may not repay in full.

Net worth is what you own minus what you owe. It matters if you want to show that you are an accredited investor, so it is worth working out carefully. Leave out your primary residence: its value does not count as an asset, and the mortgage on it does not count as a debt — unless the mortgage is more than the home is worth, in which case the excess counts as a debt. 1. Decide whether you are calculating for yourself alone, or jointly with your spouse or partner. 2. List your assets, at today's value: • Cash and equivalents — checking and savings accounts, money-market accounts, certificates of deposit, Treasury bills, cash. • Investments — stocks, bonds, mutual funds, annuities, the cash value of life insurance, pensions and retirement accounts such as an IRA or 401(k). • Other property — rental or vacation property, vehicles, boats, jewelry, collectibles and household furnishings. Not your primary residence. 3. Add them up: that is your total assets. 4. List what you owe: car loans, margin loans, mortgages on property other than your home, credit cards, medical bills, personal and student loans, taxes due and other unpaid bills. 5. Add them up: that is your total liabilities. 6. Subtract total liabilities from total assets. The difference is your net worth. Example. A couple owns a home worth $250,000 with a $100,000 mortgage, an investment portfolio worth $100,000, and cars and other property worth $25,000, and owes $10,000 on a car loan. The home and its mortgage are left out. Their net worth is $100,000 + $25,000 − $10,000 = $115,000.

StateCF does not assess offerings for you, and nothing on the portal is a recommendation. Each investor must do their own review of the offering materials. Things experienced investors commonly look at: • The management team and its track record. • The business model, and how the company makes or will make money. • The market, and the competition in it. • What sets the company apart, and how easily that could be copied. • Historical financial results, and any projections — remembering that projections are not results. • Unit economics: what it costs to make and sell one unit, and what it earns. • The capitalization table: who owns what today. • Use of proceeds: what the money will be spent on. • Legal matters: disputes, liabilities and related-party dealings. Consider speaking to your own financial, legal or tax adviser before you invest.

Read the terms on the offering page and in the documents before you subscribe. The ones that matter most: • The minimum and maximum amount the company is raising. • The price per share, and the valuation it implies. • The type of security, and the rights that come with it. • Voting rights. • Protection against dilution, if any. • Dividends, if any. • Liquidation preference: who is paid first if the company is sold or wound up. • Conversion rights, if the security can convert into another. The terms on the offering page are the terms of the offering. They are not negotiated with individual investors.

You can lose the entire amount you invest. Private-company shares are illiquid, may have no market, can be diluted, and ongoing reporting may be limited. Read the Investor Education document and each company's risk factors.

Depending on how the company performs, the terms of your investment, the terms of later financing and whether the company is ever sold, the outcome can be anything from: • losing everything you invested; • getting some of your money back, at a loss; • getting your money back; • getting your money back with a small gain; • a return well above what you invested. Do not invest money you cannot afford to lose. Most small private companies do not produce a large return, and many fail.

Companies usually raise money more than once. Each time new shares are issued, the percentage of the company you own goes down — your stake is diluted, even though you hold the same number of shares. Dilution is not always bad: if later investors pay a higher price per share and the money grows the business, the value of your smaller percentage can still rise. If they pay a lower price, it can fall. Dilution can also reduce your share of the vote.

Some offerings give investors the right to buy more shares in a later round, so that they can keep their percentage ownership. These are called pro-rata or pre-emption rights. If an offering does not include them, or you do not use them, your percentage may fall in later rounds. Also look for drag-along rights (which can require you to sell if a majority does) and tag-along rights (which let you join a sale by the majority). Whether any of these apply depends on the terms of that offering.

An exit is when investors can turn their shares into cash — usually when the company is bought or goes public. There is no guarantee that any company will ever be bought or go public, so there is no guarantee of an exit. Your investment may stay illiquid indefinitely.

In a bankruptcy, the company's lenders and other creditors are paid before its shareholders. Shareholders are often left with nothing, and you could lose everything you invested.

Many investors set their own approach before they invest, based on their experience, their finances and their values. Things they commonly decide in advance: • which kinds of company and which industries they understand; • how much in total they are willing to put into private companies; • how much to put into any one company; • whether they prefer shares or debt; • how many companies to spread it across. This is general information, not advice. StateCF does not advise on how much to invest; your own adviser can.

No. StateCF reviews each company before its offering is published: that it fits the Florida exemption, that its covered persons are screened, and that its materials are free of misleading statements. That review does not guarantee the company will succeed, does not guarantee a return, and cannot guarantee there are no errors or omissions in what the company provides. These investments are illiquid, risky and speculative, and you may lose everything you invest.

A Florida company opens a company account, completes the capital-readiness application, prepares its tombstone and presentation room, files its notice with OFR through REAL, and is reviewed by StateCF for antifraud and Chapter 517 fit before anything is published.

Facts about the company and the offering terms, that it is listed on the portal, that its deposit account is inside ten days of a possible close, or that the offering closed. Every announcement must state that the offer is limited to Florida residents.

Before anything is published, StateCF's review looks for, and investors can expect to find in the presentation room: • The company's name, legal form, address and website. • Its directors and officers, with their backgrounds, and anyone owning 20% or more. • A description of the business and its plan. • Its financial condition and financial statements — and whether they were audited, reviewed by an independent CPA, or neither. • The target and maximum amounts, and the deadline. • The securities offered, their price and how the price was set. • How the money raised will be used. • The risk factors. • Its ownership, capitalization and debts. • Related-party transactions. • How StateCF is paid on the offering.

Keeping investors informed is part of running a company with outside shareholders, and a record of good communication helps with the next raise. • Business updates. Many companies write to investors monthly or quarterly: key figures, progress, new customers or partners, and problems as well as successes. Keep a monthly update to a page or two; a quarterly one can carry fuller financial information. • Financing. Tell existing investors about a new round. Their agreements may require it, and some may have the right to take part. • Offers to buy the company. Investor agreements may require investors to be told. • Meetings. A regular call or meeting with investors, in person or by video, can be worth the time. On StateCF, material changes to an offering go through the portal, investors are asked to reconfirm where the change requires it, and the monthly update of sales and cancellations is published on the offering page automatically.