Question 1

What is Regulation D 506(b), and why should business owners care?

Accepted Answer

Rule 506(b) is the most widely used way for private companies to raise capital in the United States without registering the offering with the SEC. It's a safe harbor under Regulation D that lets you sell securities — equity or debt — to an unlimited number of accredited investors and up to 35 non-accredited investors, with no cap on how much you raise, as long as you don't publicly advertise the offering. It's flexible, relatively low-cost, imposes no dollar ceiling, and doesn't require you to formally verify each investor's wealth. The main catch: you generally must raise from people you already have a relationship with. For most founders raising a friends-and-network or seed round, 506(b) is the default tool. Related topics: Regulation D 506(c) &middot; Regulation S &middot; Section 4(a)(2) &middot; Issuer FAQ

Question 2

Can I raise money from non-accredited investors under 506(b)?

Accepted Answer

Yes, but only in a limited way — 506(b) permits up to 35 non-accredited investors in any 90-day period, and those investors must be sophisticated, meaning they have enough financial and business knowledge to evaluate the risks and merits of the investment, on their own or through a purchaser representative. Including any non-accredited investor triggers a much heavier disclosure obligation: you must give them detailed, registered-offering-style information about the company and its financials. That added burden is why many founders, despite being allowed up to 35 non-accredited investors, structure their rounds as accredited-only — it's simpler and cheaper. So the honest answer is yes, you can include them, but doing so meaningfully raises your disclosure and compliance load. Related topics: Regulation D 506(c) &middot; Regulation S &middot; Section 4(a)(2) &middot; Issuer FAQ

Question 3

What's the difference between Rule 506(b) and 506(c)?

Accepted Answer

The core difference is advertising versus verification. Under 506(b), you cannot engage in general solicitation — no public advertising, mass emails, or social-media blasts — and you must generally rely on pre-existing relationships; in exchange, you don't have to formally verify accreditation and you may include up to 35 sophisticated non-accredited investors. Under 506(c), you can advertise the offering publicly, but every purchaser must be accredited and you must take reasonable steps to verify each one's status — tax returns, bank statements, or third-party confirmations. Both allow unlimited raises and both preempt state registration. Choose 506(b) to raise quietly from a known network with lighter verification; choose 506(c) to advertise publicly with every investor accredited and verified. Related topics: Regulation D 506(c) &middot; Regulation S &middot; Section 4(a)(2) &middot; Issuer FAQ

Question 4

Can I publicly advertise my raise under 506(b)?

Accepted Answer

No — this is the single most important restriction in 506(b): you cannot use general solicitation or general advertising to market the offering. That means no public roadshows, no social-media posts promoting the raise, no mass emails to strangers, and no posting the deal on a public website open to anyone. You must raise from investors with whom you, or someone acting for you, have a pre-existing, substantive relationship. Note the distinction: you can advertise your company and products in the ordinary course — the prohibition covers publicly advertising the securities offering itself. If you want to advertise the raise to the broad public, you need Rule 506(c), which allows advertising but requires verifying that all investors are accredited. Blurring this line is one of the most common and dangerous 506(b) mistakes. Related topics: Regulation D 506(c) &middot; Regulation S &middot; Section 4(a)(2) &middot; Issuer FAQ

Question 5

What is a Form D filing, and when do I need it?

Accepted Answer

Form D is a brief electronic notice you file with the SEC on EDGAR to report that you've conducted an exempt offering under Regulation D. It covers basic information about the company, the offering, the exemption you're relying on, and the amounts — a notice, not an application for approval. You must file it within 15 days after the first sale of securities in your offering, and most states also require a corresponding notice filing and fee where you have investors. Don't skip it: while a late or missed Form D doesn't automatically destroy your federal exemption in every case, failing to file can jeopardize your ability to rely on Rule 506 in the future and can create problems with state regulators. Related topics: Regulation D 506(c) &middot; Regulation S &middot; Section 4(a)(2) &middot; Issuer FAQ

Question 6

Can I raise money internationally using 506(b)?

Accepted Answer

You can raise from some foreign investors under 506(b) — a foreign investor can participate if the offering complies with 506(b)'s rules, including the accreditation and no-general-solicitation requirements, and foreign investors can qualify as accredited under the same financial standards. However, selling securities into other countries also implicates those countries' securities laws, which 506(b) does nothing to satisfy. For offerings targeted at investors outside the U.S., companies frequently rely on Regulation S, the exemption for offshore offerings, often in parallel with a 506(b) offering to U.S. investors. So yes, foreign investors can join a 506(b) round, but cross-border raises need attention to foreign law and often a Reg S component — a structuring question for securities counsel experienced in international offerings. Related topics: Regulation D 506(c) &middot; Regulation S &middot; Section 4(a)(2) &middot; Issuer FAQ

法规 D 506（b）

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