Question 1

What is Regulation D 506(c), and should my company use it?

Accepted Answer

Rule 506(c) is the Regulation D exemption that lets a private company raise an unlimited amount of capital while publicly advertising the offering — something its sibling 506(b) forbids — as long as every investor is accredited and the company takes reasonable steps to verify that. Created by the 2012 JOBS Act and effective in 2013, it let private companies market a securities raise openly for the first time: online, social media, demo days, public events. Consider 506(c) if you want to reach investors beyond your existing network and are comfortable excluding all non-accredited investors and verifying each investor's status. If you're raising quietly from people you already know and might include a few non-accredited friends, 506(b) is usually the better fit. Related topics: Regulation D 506(b) &middot; Regulation A+ &middot; Campaign Marketing &middot; Issuer FAQ

Question 2

Can I advertise my 506(c) offering publicly?

Accepted Answer

Yes — this is the headline feature of 506(c) and its single biggest advantage over 506(b). Under 506(c), you can engage in general solicitation and general advertising: you can promote the raise on your website, social media, email campaigns, at public demo days and pitch events, through press, and to people you have no prior relationship with. This freedom to market openly is exactly why the JOBS Act created 506(c). The catch is the flip side: because you're allowed to advertise to everyone, everyone who actually invests must be an accredited investor whose status you've verified. You can cast the net as wide as you like in marketing, but you can only accept money from verified accredited investors — that is the essential 506(c) bargain. Related topics: Regulation D 506(b) &middot; Regulation A+ &middot; Campaign Marketing &middot; Issuer FAQ

Question 3

How do I verify accredited investor status for a 506(c) offering?

Accepted Answer

506(c) requires you to take reasonable steps to verify each investor is accredited — a higher bar than 506(b)'s reliance on representations. Traditional methods include reviewing IRS documents to confirm income, reviewing bank or brokerage statements to confirm net worth, or obtaining written confirmation from the investor's CPA, attorney, or a broker-dealer; many issuers use third-party verification services. In a March 2025 no-action letter, the SEC described a streamlined path: a high minimum investment — at least $200,000 for individuals or $1 million for entities — combined with the investor's written representation that they're accredited and haven't financed the investment through a third party, provided the issuer has no actual knowledge to the contrary. A no-action letter has no legal force, so the verification approach is a decision to make with counsel. Related topics: Regulation D 506(b) &middot; Regulation A+ &middot; Campaign Marketing &middot; Issuer FAQ

Question 4

Can non-accredited investors participate under 506(c)?

Accepted Answer

No — this is a firm, defining limit of 506(c): every purchaser must be an accredited investor, and non-accredited investors cannot participate at all. Unlike 506(b), which allows up to 35 non-accredited sophisticated investors, 506(c) has zero tolerance here. If even one non-accredited investor buys into a 506(c) offering, you've violated the exemption's conditions and jeopardized your ability to rely on it. This all-accredited requirement is the price 506(c) charges for letting you advertise publicly — the SEC's logic being that if you broadcast the offering to the world, everyone who actually invests must be verified accredited. If including non-accredited friends, family, or community matters to you, 506(c) is the wrong tool; look to 506(b) or Regulation Crowdfunding instead. Related topics: Regulation D 506(b) &middot; Regulation A+ &middot; Campaign Marketing &middot; Issuer FAQ

Question 5

Are there resale restrictions on 506(c) securities?

Accepted Answer

Yes — securities sold in a 506(c) offering are restricted securities, meaning investors cannot freely resell them immediately. They're subject to holding-period and other conditions before resale, generally under Rule 144, which for a reporting company typically requires a six-month holding period — longer, and with more conditions, for non-reporting companies, commonly a year. The securities carry restrictive legends reflecting these limits, and your transfer agent must enforce them. This illiquidity is a fundamental feature of private-placement securities, whether 506(b) or 506(c): investors are buying an illiquid position and generally cannot sell until the holding period passes or the shares are registered or another resale exemption applies. There may be no market for resale at all, and managing investors' expectations about this is an important part of the raise. Related topics: Regulation D 506(b) &middot; Regulation A+ &middot; Campaign Marketing &middot; Issuer FAQ

Question 6

Can foreign investors participate in 506(c) offerings?

Accepted Answer

Foreign investors can participate in a 506(c) offering, but they must still meet the accredited investor definition and be verified like any other 506(c) investor — the requirement applies regardless of nationality. The added complexity is that selling securities into other countries also triggers those countries' securities laws, which 506(c) does nothing to address. For offerings aimed at investors outside the U.S., companies commonly rely on Regulation S, the exemption for offshore offerings, often in parallel with a 506(c) offering to U.S. investors — though care is needed because 506(c)'s general solicitation can raise questions about Reg S's no-directed-selling-efforts condition. Cross-border raises need careful structuring, which is a matter for securities counsel experienced in international offerings. Related topics: Regulation D 506(b) &middot; Regulation A+ &middot; Campaign Marketing &middot; Issuer FAQ

法规 D 506（c）

您将获得什么

融入每笔交易

固定费用披露

理解规则 506（c）

一眼望去

“合理的验证步骤”是什么意思

主要法律和实际影响

发行人实用清单

法规 D 506（c）, 深入

法规 D 506（c） — 问题与答案