How to Check a Sponsor on EDGAR, Free, in Twenty Minutes

Every US exempt offering leaves a trail in the SEC's EDGAR system, and anyone can read it. The exact searches to run on a data center sponsor, which forms matter, and what their absence tells you.

Before you give a sponsor money, you can read what it has already told the federal government. The SEC's EDGAR system is free, requires no account, and contains filings that say what actually happened rather than what a landing page says will happen.

Most retail investors never open it. This page is the twenty-minute version.

Start here

Two tools do almost everything:

• EDGAR company search — find an entity by name and list every filing it has made.
• EDGAR full-text search — search the contents of filings since 2001. This is the powerful one, because it finds entities you did not know the name of.

Search the issuer's name, the sponsor's name, the manager's name, and the project or property name. Each may file under a different entity, and the differences between them are informative.

The forms that matter, and what each tells you

Form D — a notice of an exempt offering under Regulation D. Short, but it names the issuer, its executive officers and directors, the exemption claimed, the offering size and the amount sold to date. A sponsor with several past Form D filings has a history you can trace. One with none has not raised under Reg D before, or has used another route.

Form 1-A — the offering statement for a Regulation A offering, including the offering circular. This is the full disclosure document: business, risk factors, use of proceeds, fees, management, financials.

Form 1-K — the annual report for a Tier 2 Regulation A issuer. The SEC requires Tier 2 issuers to file ongoing reports and to provide audited financial statements (SEC, Regulation A).

Form 1-SA — the semiannual report for a Tier 2 issuer.

Form 1-U — a current report, filed when something material happens.

Form 253G2 — the final offering circular as used, which is the version investors actually received.

The reason to care about 1-K and 1-SA specifically: an offering circular describes a plan, and an annual report describes an outcome. A sponsor with three years of 1-Ks is a sponsor whose previous promises can be compared with its previous results. That comparison is the single most useful thing on EDGAR and almost nobody does it.

The nine checks

Work through these in order. Each is a search plus a read.

1. Does the issuing entity exist on EDGAR at all? If an offering is being made under Reg D, a Form D should appear. If it is being made under Reg A, there should be a 1-A. Absence is not automatically wrong — filing deadlines and exemptions vary — but it is a question to put to the sponsor.
2. Who are the named officers and directors? Form D names them. Then search each person's name in full-text search. People appear across entities.
3. What else has this sponsor raised? List every prior Form D and 1-A. Sizes, dates, and asset types.
4. Did the prior deals report afterwards? Look for 1-K and 1-SA filings under the prior issuers. A sponsor that raises under Tier 2 and then files annual reports on time is behaving like a sponsor that expects scrutiny.
5. Read one prior 1-K against its 1-A. Did the earlier project lease when it said it would? Did it distribute what it projected? This takes fifteen minutes and tells you more than any amount of marketing.
6. Compare the fee sections of the current offering circular and the prior ones. Fees that have grown between deals, with no corresponding change in what the sponsor does, is a fact worth raising.
7. Check the financial statements for the issuing entity, not the sponsor's group. In a single-asset deal the entity you invest in may be newly formed with no history — which is normal, and worth knowing explicitly.
8. Search the project name and the property address. Full-text search covers filing contents, so a property can appear in another issuer's filings — a prior owner, a lender, a joint venture partner.
9. Check for enforcement history. Search the sponsor's and the principals' names on the SEC's site and on FINRA BrokerCheck. The absence of a record is worth confirming rather than assuming.

Reading the absence of filings

A sponsor with no EDGAR history at all is not disqualified. Everybody has a first deal, and Rule 506(b) offerings to accredited investors are a legitimate route that produces only a thin trail. What it does mean is that you have no independent record to check, and that every claim about the sponsor's track record rests on the sponsor's own description of it.

In that situation, the reasonable response is to ask for the track record in a form that can be verified: entity names, dates, amounts raised, and what each project eventually did. A sponsor with a good record will produce that readily, and you can cross-check whatever part of it touches a filing.

What this does and does not substitute for

EDGAR tells you about the sponsor and the issuer. It does not tell you whether this particular building, in this location, at this price, with this tenant, is a good investment. For that you still need the lease terms (here), the power position (here), the fee load (here) and the exit (here).

What EDGAR does is answer the question diligence usually cannot: has this person done this before, and what happened? That question costs nothing to ask and the answer is public.

What to read next: questions to ask a sponsor for the conversation, and how to read an offering circular for the document.

Nothing here is investment advice or a recommendation of any security. See how this site is funded.