Texting Investors About Your Deal: TCPA and Rule 506 Rules for Sponsors
On this page
Text messages get read, which is why sponsors use them to remind investors about a webinar or a wire deadline. They also sit under two sets of rules at once: the Telephone Consumer Protection Act (TCPA) for how you text, and Rule 506 for whom you may reach out to about an offering. This post explains both in plain terms. It is general information and not legal advice, and the details change, so check current rules before you send a campaign.
What does the TCPA require?
The TCPA restricts calls and texts made with an automatic telephone dialing system or a prerecorded voice, and sets rules for telemarketing, including the National Do Not Call Registry (47 U.S.C. 227, donotcall.gov). For marketing texts, the usual standard is prior express written consent, meaning a signed or electronic agreement that clearly says the person agrees to receive marketing texts from you. A person can sue for $500 per violation, and up to three times that if the violation was willful (47 U.S.C. 227(b)(3)). Telemarketing calls and texts also have time-of-day limits (generally 8 a.m. to 9 p.m. in the recipient's time zone).
Does this apply to a text to one friend?
A message you type and send to a person who knows you is not what the law is aimed at. A mass text sent through a platform, a drip sequence or any automated system is. The more automated and the more it reads as a pitch, the more you need written consent. Using a business texting service also means registering your campaign with carriers; unregistered business texts are often blocked.
How do texts fit Rule 506?
| Raise type | Who you can text about the offering |
|---|---|
| Rule 506(b) | Only people with whom you already have a pre-existing, substantive relationship. A cold text to a purchased list is general solicitation (17 CFR 230.502) |
| Rule 506(c) | Anyone, because general solicitation is allowed, but every purchaser must be accredited and verified, and the TCPA still applies |
Whatever you send is part of the offer. Keep it factual, avoid promises of returns, and point to the full documents. See what is general solicitation and disclaimers for social posts.
How should you collect consent?
- Use a plain sign-up box on your waitlist form. State that the person agrees to receive texts about your deals, that message frequency varies, that data rates may apply and that they can reply STOP.
- Do not pre-check the box and do not bundle it with agreeing to anything else.
- Store the record: the date, the number, the wording shown and the page. You may need to prove it.
- Honor STOP everywhere. Keep one list that every tool checks. See investor CRM.
- Send only what you promised. If someone agreed to webinar reminders, do not start pitching a new deal.
Our take
Use email for the offer and text for the nudge. Email lets you attach the legends and documents, and it is easier to prove what was sent. Keep texts short, link to the deal page and let people choose whether to receive them.
Trade-offs and who this is not for
- Not for cold lists. Buying phone numbers and texting them is the riskiest option on both fronts.
- Common mistake: adding people to a text list because they bought your course.
- Not a substitute for counsel. State laws can add more limits.
How DoorRaise fits in
DoorRaise helps sponsors raise equity for apartment buildings with 5+ units from friends and followers who already trust them, under Rule 506(b) or 506(c). We are software, legal document preparation, escrow coordination and verification services. We are not a law firm, broker-dealer, investment adviser, funding portal, bank or escrow agent, and we do not hold investor money: investors wire their money to escrow at Enterprise Bank & Trust, in the deal's name.
DoorRaise keeps the deal in its own company with its own documents and a deal page, and runs an accreditation check on every investor, in 506(b) and 506(c) raises. Flat fees, never a percentage of the raise (see pricing). Create your free sponsor page.
FAQ
Can I text my waitlist about a new deal?
Yes if they agreed to receive texts from you and, in a Rule 506(b) raise, you already have a relationship with them. Keep the consent record.
Do I need consent to text an investor a wire reminder?
A message about an investment they already made is treated differently from marketing, but rules vary and the line is not always clear. Getting consent at signup avoids the question.
What happens if someone replies STOP?
Stop texting them right away and keep their number on a suppression list so no tool sends to it again.
Are WhatsApp or iMessage messages covered?
Rules differ by service. The Rule 506 analysis is the same: a mass pitch to people you have no relationship with can be general solicitation.
Sources
- 47 U.S.C. 227, Telephone Consumer Protection Act
- National Do Not Call Registry
- 17 CFR 230.502, general solicitation
- FTC, CAN-SPAM Act compliance guide
This article is general information, not legal, tax or investment advice. Talk to an attorney about telemarketing and securities rules before you run a text campaign. DoorRaise is not a law firm, broker-dealer, investment adviser or funding portal.