HALOS Act Loosens Fundraising Rules for Startups: What It Means for Angel Investors and Accelerators

The Helping Angels Lead Our Startups Act of 2025 (HALOS Act) is aiming to make it easier for young companies to find early-stage funding by creating a new loophole in securities law. This bill directs the Securities and Exchange Commission (SEC) to update Regulation D within six months, allowing companies to publicly present their investment opportunities at specific, sponsored events without violating the ban on “general solicitation.” Translation: Startups can now talk about raising money in a public setting without running afoul of rules designed to prevent mass advertising of private deals.

The New Meet-Cute for Startups and Cash

Before this bill, advertising private investment opportunities was largely off-limits unless you were only talking to people you already knew well, which is tough for a new company trying to get noticed. The HALOS Act carves out an exception for events sponsored by accredited universities, non-profits, government bodies, accelerators, and, critically, “angel investor groups.” To qualify, these angel groups must be composed of wealthy, accredited investors and cannot be tied to brokers or investment advisors. This means if you’re a startup founder, you now have a clearer, legally sanctioned path to pitch your idea and mention your fundraising goals to a room full of potential investors at a university-sponsored demo day or a local accelerator event.

Strict Rules for the Gatekeepers

The bill puts the burden of compliance squarely on the event sponsors. If a local university or non-profit hosts one of these events, they can’t give investment advice, recommend any specific company, or actively jump into negotiations between the startup and the investor. They also can’t get paid a commission or a percentage of the money raised; they can only charge small administrative fees. This is the bill’s attempt to prevent these sponsors from acting like unregistered broker-dealers. Furthermore, the sponsor must hand out an SEC-designed disclosure to every attendee, explaining the risks involved in investing in these companies. For the busy accredited investor, this means more deal flow, but also a reliance on the sponsor to maintain the integrity of the event.

What You Can and Can’t Say on Stage

Even with this new freedom, the information shared remains limited. A company presenting can only state that they are offering or planning to offer securities, the type and amount of securities, how much they’ve already raised, and what they plan to use the money for. They cannot hand out detailed offering documents. Think of it as a teaser trailer, not the full feature film. The bill is clear that this change only affects the presentation; the actual sale of securities still has to follow all existing rules. Crucially, attending one of these sponsored events does not automatically create a “pre-existing substantive relationship” between the company and the investor, which is a key requirement for using certain private offering exemptions like Rule 506(b).

The Real-World Trade-Off

For startups, this is a clear win for visibility and networking. It provides a defined, legal mechanism to get in front of accredited investors without the legal gray area that often surrounds early-stage networking. For the rest of us—the general public who are not accredited investors—the impact is more indirect. While we can’t invest, this change does create a new, slightly less regulated channel for private offerings to be advertised. The risk here is that if sponsors aren't meticulous about following the rules—especially the ban on receiving commissions—it could lead to more exposure for poorly vetted or even fraudulent issuers, even if only accredited investors are the target audience. The SEC will need to be sharp about enforcing the sponsor restrictions to ensure this doesn't become a backdoor for bad actors to target wealthy individuals.