You can build the best
debt fund in the world, but if

you don't raise capital the
right way, the SEC can shut it

down before it gets off the
ground. Compliance isn't

optional. It's survival. Let's
dive into how you can legally

and safely and confidently raise
your capital for your debt fund.

I'm Tilden Moschetti syndication
attorney and founder of

Moschetti syndication law. I
help fund managers raise money

the right way so they can grow
their funds without sleepless

nights worrying about the SEC.
Today I'm going to walk you

through exactly what you need to
know to raise capital

compliantly for your debt fund.

When you start raising capital
for a debt fund, it's exciting,

but it's also where most new
managers run straight into

hidden dangers, because the
moment you take $1 from an

investor, you're no longer just
a fund manager, you're an issuer

of securities, whether you
realize it or not, and that

means you're operating under a
tight set of federal rules

designed to protect investors
and to penalize managers who cut

corners. The good news is that
Regulation D gives debt fund

managers a practical path
forward. It allows you to raise

an unlimited amount of money
without having to register your

fund with the SEC, saving you
time complexity and hundreds of

1000s of dollars in costs. But
Regulation D isn't a free pass.

It has strict rules, and you
have to pick your lane. Rule 506

B and Rule 506 C are the two
main choices on which you

choose, which sets the stage for
everything else that follows. If

you decide to raise capital
privately through people you

already have relationships with,
you're in 506 B territory. Under

506 B. You cannot publicly
advertise. No Facebook posts, no

podcasts, no email blasts to a
list of strangers. Everything

has to happen through quiet,
personal conversations with

investors you already know and
trust. You can accept up to 35

sophisticated but non accredited
investors, along with an

unlimited number of accredited
investors, but you do have to be

careful. Sophistication means
that they must have the

financial knowledge to evaluate
the risks themselves. It's not

just about whether they like
you, it's about whether they

genuinely understand what
they're getting themselves into.

But maybe you don't have a huge
personal network, or maybe you

want to scale bigger faster.
Well, that's where rule of 506 C

comes in. 506 C lets you
advertise your offering

publicly. You can post on
LinkedIn, run ads, speak at

events, anything to get the word
out, but there's a major trade

off. You can only accept
accredited investors, and you

must verify that they're
accredited before taking a dime.

That means real proof, tax
returns, bank statements or

letters from CPAs or attorneys,
not just someone checking a box

and saying, trust me, verifying
accreditation isn't just

paperwork. It's your shield
against claims. Later, if things

go wrong, whichever path you
take, whether it's 506 B or 506

C, you must also file a Form D
with the SEC within 15 days

after you raise your first
dollar. It's a short filing, but

it's absolutely essential. Think
of it like raising your hand to

let regulators know, yes, we're
raising money, and yes, we're

claiming an exemption from
registration, skip that, and

you're operating outside of the
law, even if you thought you

were doing everything else
right. But your responsibilities

don't stop at the federal level.
Every state where your investors

live have its own securities
division, its own blue sky laws,

and often its own notice filing
requirements. That means every

time you accept an investor from
a new state, you might have new

filings, fees and deadlines to
deal with. Managing those state

filings is not glamorous work,
but missing them can open up

massive.

Problems, including fines,
rescission demands and loss of

your exemption. That's why a
strong administrative systems or

working with legal counsel who
tracks it all for you makes a

world of difference. Now here's
where a lot of fund managers

stumble. They treat compliance
like a one time box to check.

But raising capital is an
ongoing journey. Every

communication that you have with
investors, every email, every

webinar, every social media post
has compliance implications.

What you say in just as
importantly as what you don't

say can either can strengthen
your legal position or put it at

risk over promising returns.
Minimizing risks or creating

unrealistic expectations are
common pitfalls that land

managers in hot water. Remember,
securities law is built on full

fair disclosure, not hype.
That's why professional offering

documents matter so much. A
strong private placement

memorandum tells investors the
truth about the Fund, The Good,

the Bad and the Ugly. A well
crafted subscription agreement

ensures investors formally
represent that they understand

what they're investing into and
that they're qualified to do so

these aren't optional
formalities. They are your armor

if questions come up later. And
compliance isn't just about

covering yourself legally, it's
about building real trust. You

see, investors feel safer when
they know you're playing by the

rules. Institutional capital
won't even look at you if your

compliance house is in an order.
A clean, professional, compliant

offering is a massive
competitive advantage in today's

environment, and it's not a
burden. Raising capital is the

life blood of any debt fund, but
how you raise it legally,

transparently and
professionally, is what

determines whether your fund is
built to last. If you get it

right from the beginning, you
can grow and scale with

confidence.

Raising capital for a debt fund
isn't just about selling your

opportunity. It's about
protecting it, playing it smart,

playing it compliant, and
building something that

investors are proud and safe to
be a part of, if you want to

help making sure that your
capital raise is bulletproof,

reach out to me. I'm Tilden
Moschetti, thanks for listening

and go and make something great
you.