Glossary
General solicitation
Definition of general solicitation in securities law, which offerings permit public advertising and which forbid it, and why it decides what a raise can market.
General solicitation is offering securities to the public at large, through advertising or other communications to people with whom the company has no pre-existing, substantive relationship. Whether an offering may use general solicitation is the single rule that most shapes how it can be marketed.
What counts
The term comes from Rule 502(c) of Regulation D, which pairs it with "general advertising." It covers any advertisement, article, notice, or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio, and any seminar or meeting whose attendees were invited by general solicitation or general advertising. The SEC treats public websites, social media posts, and paid digital ads the same way. A communication to people with whom the company or its agent has a pre-existing, substantive relationship is generally not general solicitation.
Which offerings allow it
| Exemption | General solicitation |
|---|---|
| Rule 506(b) | Not permitted |
| Rule 506(c) | Permitted; every purchaser must be a verified accredited-investor |
| regulation-crowdfunding | Permitted before filing under rule-206; after the form-c is filed, ads that state the terms are limited to a notice pointing to the platform |
| regulation-a-plus | Permitted, under rule-255 before qualification and freely after it, subject to antifraud rules |
| rule-241 | A generic solicitation of interest is permitted before the exemption is chosen |
Communications that are not general solicitation
The SEC's 2020 amendments added Rule 148, which says certain "demo day" presentations sponsored by a college, government body, nonprofit, angel group, or similar organization are not general solicitation, if the sponsor meets conditions on fees and recommendations. The same amendments added Rule 152, which sets out when a public offering and a nearby private one are treated as separate offerings, so that a company can advertise one without spoiling the other. The details are in the SEC's compliance guide.
Why it matters to marketing
General solicitation is what makes paid media legal. A 506(b) raise cannot run ads; a 506(c), Reg CF, or Reg A raise can, each with its own conditions. Choosing the exemption is therefore also choosing the marketing plan, which is why HookVerb treats the exemption as the first strategic decision in a raise. See securities-offering-exemptions-compared and investor-acquisition.
Further reading
- advertising-rules-by-exemption
- advertising-channels-for-raising-money
- reg-a-plus-and-reg-d-at-once
- crowdfunding-vs-traditional-fundraising
This page is general information about securities rules, not legal advice. Whether a particular communication is general solicitation is a question for the company's own securities counsel.