Regulation D

Regulation D is the set of rules under which most private companies in the United States raise money without registering the offering with the SEC. It is the classic private placement exemption, and unlike Regulation A+ or Regulation Crowdfunding it is aimed almost entirely at accredited investors. There is no dollar cap.

The two rules that matter to a marketer are both inside Rule 506.

Rule 506(b)

The traditional private placement. A company may sell to an unlimited number of accredited investors and up to 35 non-accredited but sophisticated investors, and may rely on the investor's own representations about accredited status.

The condition that shapes marketing is that no general solicitation or general advertising is permitted. The company may not advertise the offering publicly, and is generally expected to have a pre-existing, substantive relationship with the people it approaches. A public ad campaign for a 506(b) offering is not a tactic, it is a problem.

Rule 506(c)

Introduced by the JOBS Act. A company may advertise the offering publicly, including on paid channels, in exchange for two constraints: every purchaser must be an accredited investor, and the company must take reasonable steps to verify that accredited status rather than accept a self-certification. Verification usually means reviewing tax documents, brokerage statements, or a letter from an attorney, accountant, or broker-dealer.

Securities sold under Regulation D are restricted securities and generally may not be freely resold.

Why it matters to marketing

The 506(b) and 506(c) choice decides whether an offering can be marketed at all. It also decides funnel design: a 506(c) campaign has to carry accreditation verification inside the conversion path, which is a materially higher-friction step than anything in a public offering, and it should be measured accordingly.

Companies frequently pair a Regulation D offering for domestic accredited investors with Regulation S for offshore investors, and sometimes run one alongside a public offering under Regulation A+.

This page is general information about a securities exemption, not legal advice.