Does Testing the Waters (TTW) Improve Offering Success?

Testing the Waters (TTW) is the ability for an issuer to “test” the appeal of their online investment offering with investors before incurring the expenses of financial audits, legal paperwork, and SEC filings.

As with most tools, it can be a double-edged sword. While TTW allows companies to collect investor “reservations” in advance, regulations require those investors to reconfirm their commitment once the offering officially launches. Often, we see TTW campaign investments drop off during that reconfirmation period, and sometimes, the final amount never recovers to the same level that was initially reserved before the campaign went live.

We analyzed data from 14 TTW offerings over the past two years to see whether TTW campaigns truly help or hinder final offering success. The vast majority of TTW offerings that saw significant success (raising at least $50k+) were on Wefunder and StartEngine, so we limited our analysis to those two platforms.

While there were 40+ significant (>$25k) TTW campaigns from 2021–2022, only about 30 significant TTW campaigns¹ have been launched since January 2023 — and just 19 of those actually converted into successful raises.

Final Capital Raised as a Percent of TTW Commitments

This chart shows that there is an interesting pattern in TTW offerings on Wefunder vs. StartEngine. The size of the bubbles represents the final total amount of capital invested, and the Y-Axis shows the percent of total capital at close as a percent of the amount that was reserved during TTW. For example, if a campaign had $100K reserved during TTW and ended up raising $200K total, they would appear at “200%” on the chart.

(Hover to interact with the chart and see more data)

Note: the following raises from the plot are still Active and may increase — On Wefunder: Bepo, Hempitecture, and Lit Motors. On StartEngine: StartEngine and Boxabl.

Looking at TTW offerings on these two platforms, an interesting trend emerges:

• Wefunder TTW offerings tend to close their final raise at roughly the same amount that was reserved, with the median final raise at 99% of the highest TTW amount.
• StartEngine TTW offerings actually close their final raises well above the TTW reserved amount, with a median of 220% of the TTW figure.

Why do most Wefunder TTW campaigns end up at or below their highest TTW reservation amount, while StartEngine TTW offerings often close at 200–600% of their initial TTW figure?

Several factors might be at play:

1. Type of offering (Reg CF vs. Reg A+). More of the StartEngine raises were Reg A+ campaigns, whereas all the Wefunder offerings were Reg CF. Reg A+ campaigns tend to feature more mature companies with larger marketing budgets.
2. Overall scale of the raise. The median final amount raised for StartEngine TTW offerings was $5.6 million, compared to $1.5 million for Wefunder. Companies seeking higher totals may invest more in marketing, potentially driving more investor momentum.
3. Differences in reconfirmation processes. Each platform may handle reconfirmation and follow-ups differently, which can affect how many investors actually complete their investments once the offering is live.
4. Perceived momentum upon going live. On StartEngine, the raise often resets to zero on the first day after converting from TTW to live (funds are added back once investors reconfirm). This may create the appearance of a fresh start and positive momentum, potentially attracting new investors.

In many cases, StartEngine campaigns drop sharply right after converting from TTW (because they’re reset to $0) but then climb well beyond the initial TTW total. Wefunder, on the other hand, often shows the TTW total steadily holding until close, at which point any unconfirmed investments are written off (sometimes causing a drop-off at the end). These differences in accounting and investor reconfirmation processes can significantly impact the final numbers.

Sample TTW to Live Patterns by Platform

Wefunder TTW funding pattern: The total often stays flat or gradually declines until the close, when unconfirmed investments are removed.

StartEngine TTW funding pattern: The raise resets to $0 immediately after converting, then steadily increases as investors reconfirm and new investors join.

Both platforms had offerings that were in the TTW phase for a median of 63-73 days, although this varied widely, from just over a week to more than 1 year.

Median Values of TTW Offerings on Wefunder and StartEngine

Takeaways for Investors and Founders

For Investors

• Reconfirmation is Key. If you reserve an investment during TTW, you must reconfirm that commitment once the offering goes live. If you don’t, your investment won’t count — and the company’s final total might be lower than what you saw in TTW.
• TTW Amounts May Drop (Especially on Wefunder). Our data shows Wefunder campaigns are more likely to end up closing below or near the TTW total. If you see a high TTW reservation on Wefunder, be prepared for the possibility that the final raise may shrink before the offering officially closes.
• Momentum and Marketing Matter. Companies that invest heavily in marketing (especially with Reg A+ on StartEngine) often end up surpassing their TTW totals as live campaigns progress. Keep an eye on a campaign’s ongoing marketing efforts — if they’re continuing to draw in new investors post-launch, that might indicate stronger momentum and potentially higher final raises.
• Stay Informed on Platform Differences. Each funding portal handles TTW differently. StartEngine resets the raise to $0 on day one of the live offering, which can create a sense of “fresh momentum.” Wefunder appears to more gradually accounts for reconfirmations. As an investor, be aware of these mechanics so you know what to expect when campaigns transition from TTW to live.

For Founders

• Plan for the Reconfirmation Drop. Many TTW reservations will not translate into live investments without dedicated follow-up. Proactively communicate with your TTW backers, remind them of deadlines, and emphasize why your raise remains compelling.
• Leverage Marketing During the Transition. The day you switch from TTW to live can be a prime opportunity for marketing. If your campaign “resets” to $0 (on certain platforms), use that moment to create urgency and excitement around reconfirming and attracting new investors.
• Know Your Funding Path (Reg CF vs. Reg A+). Reg A+ campaigns tend to raise larger amounts and can invest more in marketing, which can help push final totals beyond initial TTW reservations. If you’re running a Reg CF campaign, be realistic about your budget, your marketing capabilities, and the likelihood of retaining or surpassing TTW commitments.
• Balance TTW Benefits with Potential Downsides. TTW can provide a sneak peek into investor demand before you sink money into audits and filings. But if you can’t convert reservations into actual investments, you risk a “peak-then-drop” phenomenon that may hurt investor perceptions.
• Optimize Your Timeline. Spending too long in TTW may dilute momentum. Spending too little time might mean you haven’t gathered enough early interest. Finding the right window to convert from TTW to live is crucial to maintain excitement and minimize drop-off.

Detailed TTW Data for Successful Offerings Since 2023

Below is the TTW data for the offerings we analyzed. Each listing shows the amount at the time of conversion from TTW to live, the amount one day after going live, and the final amount at close.

(Days in TTW are counted since Kingscrowd began tracking, which might not align perfectly with the true TTW launch date.)

¹Since 2023, Kingscrowd only tracks TTW offerings that reach at least $50k in commitments. Dozens of TTW offerings are typically live (especially on Wefunder), but most have little to no money reserved and never convert to actual funding rounds.