HALOS Act Exempts Startup Pitches at Forums from 'General Solicitation' Rules, Mandates SEC Change in 6 Months

The Helping Angels Lead Our Startups Act of 2025 (HALOS Act) is aiming to make it easier for early-stage companies to raise money by changing how they can talk about their securities offerings in public. Right now, federal securities rules strictly limit how companies can advertise or generally solicit investment, especially when talking to people who aren't already accredited investors. This bill directs the Securities and Exchange Commission (SEC) to revise its rules within six months to create a big exception: companies can present their offerings at sponsored events without triggering the general solicitation ban.

The New Rules of the Pitch

Think of this as creating a legally protected space—a kind of safe harbor—for startup pitch events. The bill defines a long list of eligible event sponsors, which includes government entities, universities, non-profits, incubators, accelerators, and, importantly, “angel investor groups.” For a startup (the “issuer”) to present at one of these events and keep its exemption, the sponsor has to play by some strict rules. Specifically, the sponsor can’t give investment advice, can’t get involved in the negotiation between the company and the investor, and can’t charge fees beyond “reasonable administrative fees.” They also can’t get paid for making introductions, which is a key detail that prevents these events from turning into unregulated broker-dealer operations.

For the busy founder trying to secure seed funding, this is a clear win. Instead of relying solely on one-on-one meetings, they can present their vision and state their fundraising goals—like “We’re raising $500,000 for product development”—to a room full of potential investors without worrying about violating complex SEC rules. This could significantly speed up the fundraising process and open up funding access in areas where venture capital is sparse, like smaller cities or rural regions.

Where the Fine Print Gets Tricky

While the goal is to streamline funding, the bill introduces complexity by relying heavily on the event sponsors to police themselves. For example, the sponsor must not receive compensation that would require them to register as a broker. This means the SEC will need to draw very clear lines between acceptable administrative fees and illegal compensation. If a university or a local angel group accidentally crosses that line—say, by charging a fee that's a little too high or by offering an opinion on a startup's valuation—the entire event could lose its protection, potentially jeopardizing the issuer's fundraising efforts. This reliance on non-financial entities to navigate nuanced securities law creates a medium level of enforcement risk.

Another important detail is that attending one of these events does not automatically create a “pre-existing substantive relationship” between the investor and the company. This is a technical but critical point in securities law. If a relationship were automatically created, the company could immediately sell securities to the investor under different rules. By explicitly blocking this, the bill ensures that while the initial pitch is easier, the actual sale of securities still requires the company to follow existing investor verification and offering rules, which is a necessary protection for investors. However, there is a risk that less sophisticated retail investors, excited by the relaxed marketing rules, might be exposed to high-risk, early-stage offerings that they don't fully understand, even with the required one-page risk disclosure.