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Testing the Waters (TTW) lets a company gauge investor interest in a Reg-A+ offering before filing Form 1-A with the SEC, by soliciting non-binding indications of interest with required disclaimer legends. It is the lowest-risk way to validate demand for a public raise — no money changes hands, and you learn whether the offering is worth the cost of filing.
Filing a Reg-A+ offering is expensive and slow — legal, audit, and qualification can run into six figures and several months. Testing the Waters lets you de-risk that commitment by measuring real interest first. Here's how it works and how to run one well.
What Testing the Waters allows
Under Regulation A, issuers may communicate with potential investors to determine interest both before and after filing the offering statement. During TTW you can:
- Run ads and content describing the planned offering.
- Collect non-binding "indications of interest" (typically an email and a soft-commitment amount).
- Build an investor list you can convert once the offering is qualified.
What you cannot do: accept money or binding commitments before SEC qualification. Indications of interest are non-binding on both sides.
The required legends
TTW materials must carry SEC-mandated disclaimer language. In plain terms, your communications must make clear that:
- No money or other consideration is being solicited, and none will be accepted.
- No sales will be made or commitments accepted until the offering statement is qualified.
- An indication of interest is non-binding.
- (After filing) where the preliminary offering circular can be found.
Pro tip: Build the legend into your landing page template and ad creative from day one. Retrofitting compliance language after a campaign is live is how avoidable violations happen. Always confirm exact wording with your securities counsel.
How to run a compliant TTW campaign
| Step | Action | Goal |
|---|---|---|
| 1. Build the page | Landing page with offering summary + legend | Capture indications of interest |
| 2. Drive traffic | Paid social, search, content | Reach eligible investors |
| 3. Capture interest | Email + soft-commit amount | Quantify demand |
| 4. Measure | Track CPL, conversion, total soft-commit | Decide go / no-go |
| 5. Convert | Nurture list to live raise post-qualification | Fast start once qualified |
Soft-commitment benchmarks: should you file?
The point of TTW is a data-driven decision. While every offering differs, a common rule of thumb is to seek soft commitments totaling 2x to 3x your minimum raise before filing, because indications of interest convert at a fraction of their stated amount once real money is required.
If your TTW campaign can't generate soft commitments at a reasonable cost per lead (see our benchmark report), that's a strong signal to fix the offer or audience before spending on Form 1-A. This is the same logic behind our Market Validation Test.
TTW vs. a full raise
Think of TTW as the validation phase and the qualified offering as the execution phase. The list and message you build during TTW become the launch engine for the live raise — campaigns that test the waters well tend to start fast, which (as we cover in why raises fail) is decisive.
Our Reg-A+ marketing team builds and runs compliant TTW campaigns end to end. Note: Growth Turbine is a marketing services provider, not a law firm or broker-dealer — always work with securities counsel on legends and filings.
Frequently Asked Questions
What is Testing the Waters in a Reg-A+ offering?
Testing the Waters is an SEC-permitted process that lets a company measure investor interest in a Reg-A+ offering before (and after) filing Form 1-A. Issuers solicit non-binding indications of interest with required disclaimer legends, but cannot accept money until the offering is qualified.
Can I collect money during Testing the Waters?
No. During Testing the Waters you may only collect non-binding indications of interest. No money or binding commitments can be accepted until the SEC qualifies the offering statement.
How much investor interest should I see before filing Form 1-A?
A common rule of thumb is soft commitments totaling 2x to 3x your minimum raise, because indications of interest convert at only a fraction of their stated amount once real money is required. Weak interest at a reasonable cost per lead is a signal to fix the offer first.
What disclaimers are required in Testing the Waters materials?
Materials must state that no money is being solicited or will be accepted, that no sales will occur until SEC qualification, and that indications of interest are non-binding. After filing, they must also point to the preliminary offering circular. Confirm exact wording with securities counsel.
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