Choosing Between Regulation D Rule 506b and 506c for Your Syndication

Ever wondered about the difference between Regulation D Rule 506b and Rule 506c offers? This piece delves into the key distinctions and how to choose between the two. Both rules allow for raising unlimited funds from an unlimited number of accredited investors. However, the key difference lies in the allowance of non-accredited investors and the ability to advertise. Rule 506b allows for a maximum of 35 non-accredited investors in any 90-day period, while Rule 506c does not permit any non-accredited investors. As for advertising, the latter allows it, while the former does not. You’re required to have a substantive relationship with all investors under Rule 506b, while under Rule 506c, every investor must be third-party verified as an accredited investor. The choice really hinges on where your investors are coming from. If you have a substantial network of potential investors, Rule 506b might be the best choice. If you need to advertise to attract investors, Rule 506c could be more suitable. This piece offers a deeper understanding of these regulations, helping you make an informed decision on which rule to choose for your fundraising needs.

Read more about Reg D Rule 506b - Rule 506b of Reg D: Non-Accredited Investors & No Solicitation: https://www.moschettilaw.com/rule-506b-of-reg-d/

Read more about Reg D Rule 506c - Rule 506c of Reg D – Solicitation & No Non-Accredited Investors: https://www.moschettilaw.com/rule-506c-of-reg-d/

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Moschetti Syndication Law Group is a boutique syndication law firm, serving small and growth-bound syndicators, as well as private equity firms. Our attorney, Tilden Moschetti, is determined to keep the firm’s ‘boutique’ size so we can tailor the services to each client’s unique needs without turning the firm into a faceless factory churning out private placement memorandums or passing unnecessary overhead expenses onto our clients. (As our client, you’ll only pay a fixed fee, so no surprises.) As for the client experience, we give real-time answers with Tilden Moschetti without making you book an official appointment or get passed along to associates or paralegals. We’ll work with your ambitions and overall vision to help you close the current deal and fill in that ‘missing’ piece – whatever you need – to keep adding more syndications to your portfolio. We keep syndicators syndicating (TM).

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