I don't think it's even negligence. When you are a startup, you are not required to file official SEC disclosures or anything of the sort. So you can use whatever you want as your terminology. Having said that, it's a really bad idea to use misleading terminology, because any sophisticated investor will know it and will consider you full of shit anyway
while its true that you may not have to file disclosures with the SEC, do not kid yourself, the second you discuss a potential investment in your company with someone you have to conform to both federal (sec) and state securities laws...
well, that's why startups talk to qualified investors who essentially sign something that says they are aware of all the risks of losing money, etc - not to general public. The point isn't the laws, the point is bullshitting sophisticated investors is a losing strategy
