What The New Age of Twitter Means for Businesses & Investors

Twitter has been officially taken over by Elon Musk, head of Tesla and SpaceX. After he bid to buy the company for $44 billion (via a tweet) in April of 2022, the board of directors at Twitter tried to incite a bidding war with no success. Elon officially became the sole owner of Twitter, taking it private, on October 28, 2022.

In the weeks since the Twitter takeover, Mr. Musk’s moves have been nothing short of newsworthy. He’s on a quest to revamp the social media platform that is potentially facing bankruptcy.

The Twitter Takeover

What’s changing at Twitter now that Elon Musk is in charge?

So far, a lot. For starters, he cut 50% of the workforce within a week, lost some major advertisers, and failed in an attempt to implement a subscription service. Twitter seems to be in trouble both fiscally and culturally, so how does Elon plan to repair the damage?

At an audio broadcast that was held to address the concerns of advertisers, Musk said he envisions Twitter to be “a place where people can shop for goods and be offered money market accounts.” He hopes to make the platform a more enticing place for content creators through monetization and to relaunch the subscription service “Twitter Blue” later in November.

Twitter Blue changes the way being officially verified works on the platform. Normally one could prove their identity with a large enough following to receive the special blue check mark next to their Twitter handle. Now one can simply pay a subscription fee of $7.99 a month in order to receive that same checkmark. This change received immediate criticism as it monetized what used to be free, and diminished the special status of being verified on Twitter.

Additionally, Elon Musk changed the work culture associated with Twitter. Twitter, like many other tech giants, has a non-traditional laid-back work culture prior to Musk’s takeover. Now Elon told employees he plans on creating a more “hardcore” environment and said if any employees cannot keep up with those demands then they can take three months' severance and leave.

Only time will tell if these efforts come to fruition and pay off.

Twitter may be in turmoil, but the takeover doesn’t affect your ability to solicit funds on the platform if you are issuing a 506(c) offering.

As of now, the same rules apply. To solicit investments online, in general, it’s important to verify that investors are accredited.

Rule 506(c) permits issuers to broadly solicit and generally advertise an offering, provided that all purchasers in the offering are accredited investors and that the issuer takes reasonable steps to verify the purchaser's accredited investor status. You can receive an accredited investor status certificate in one or two business days through VerifyInvestor.com in order to meet this requirement. Thus, it’s essential to verify prospective investors first. Learn how to verify accredited investors quickly with our handy guide.

If you are not planning to solicit investments publicly, a Rule 506(b) offering may make more sense for you. Albeit you will not be able to advertise your fund on Twitter or generally solicit at all.

All that said, how Twitter changes in the future could impact the ability to successfully fundraise on that platform.