Is my pitch deck a financial promotion?

Why fundraising material is usually caught

Section 21 of the Financial Services and Markets Act 2000 (FSMA) restricts invitations or inducements to engage in investment activity made in the course of business. Shares, bonds and other debt securities such as loan notes are controlled investments under the Financial Promotion Order, and subscribing for them is investment activity. A company that circulates material encouraging people to invest in it is acting in the course of business, even if it is a start-up raising its first round.

So unless the company is authorised, its investor material has to be approved by an authorised firm or fall within an exemption. It is the content and purpose of the material that matter, not the format or the label on it. Material that is commonly caught includes:

• pitch decks and investor presentations
• information memoranda and offer documents
• emails and newsletters to prospective investors
• crowdfunding campaign pages and videos
• social media posts, articles and podcast appearances that talk up the raise
• investor events and webinars, where what is said in the room counts too

A company can sometimes describe its business without promoting an investment, for example in press coverage that does not invite anyone to invest. Where the line sits depends on the wording, the context and who the material reaches.

How companies raising money usually deal with it

There are three common routes. They are not mutually exclusive, and a larger raise may use more than one.

Exemptions for certain investors

The Financial Promotion Order has exemptions for communications to investment professionals, high net worth companies, high net worth individuals and certified or self-certified sophisticated investors. These are the exemptions early-stage companies most often rely on. They come with conditions about who receives the material, the statements investors must sign and the warnings the material must carry. The investor thresholds and statements were changed in 2024, so older templates may no longer work. The main exemptions and their conditions

Approval by an authorised firm

The company can ask an authorised firm that holds the section 21 approver permission to approve its material. Approval can allow wider distribution than the investor exemptions. The approver has to be satisfied that the material complies with the FCA rules, and promotions of some higher-risk investments to ordinary retail investors face extra requirements or restrictions. How section 21 approval works

Raising through an authorised platform

Investment-based crowdfunding platforms operating in the UK are generally authorised firms. They communicate or approve the promotions on their platform and apply the FCA rules on who can invest and how. The company still needs to make sure that its own emails, posts and events about the raise, outside the platform, are covered.

SEIS and EIS do not deal with section 21

Advance assurance from HMRC under the Seed Enterprise Investment Scheme or the Enterprise Investment Scheme is about tax relief for investors. It is a separate HMRC matter and says nothing about whether your marketing complies with section 21. A company can hold advance assurance and still be communicating an unlawful promotion. Any promotion that mentions tax relief also needs to describe it accurately and not overstate it.

What this page does not cover

We do not advise on the investment, the valuation, the terms of the raise or whether anyone should invest. This page is only about whether the marketing of a raise is caught by the financial promotion rules. Company law also limits offers of securities to the public by private companies, and larger offers can bring in separate public offer rules. Those are questions for your corporate lawyers.

Your operations may need checking too

The financial promotion test is separate from the question of whether the company needs authorisation for what it does. A company raising money for its own trading business is in a different position from one that pools investors’ money into property, loans or other assets and shares out the returns, which can create a collective investment scheme. Lending the money on, running a platform or holding money for others can each raise their own questions. If the money raised will fund an investment-type activity, the operations test needs its own answer. Property and investment schemes · How the operations test works

Common misunderstandings

When a written opinion helps

A written opinion is worth considering before you circulate investor material, when an investor or platform asks how your communications comply, or when your raise funds an activity that may itself be regulated. A solicitor can review the actual deck, your distribution plan and the investor statements you collect, and set out whether the material is a financial promotion and whether the route you plan to use works. How written opinions work