Regulation D (Reg D) is a format of capital raising that allows businesses to sell and issue securities in their company to accredited investors. Under Reg D, there is no limit to the amount of money that can be raised or limit to the total number of investors that can invest in the offering.

There are three different rules that currently exist under Regulation D:

• Rule 506(b): Private placements in which advertising to the general public is strictly prohibited. Issuers are only allowed to approach existing relationships of theirs to invest in the offering.
• Rule 506(c): Allows issuers to advertise the offering to the general public and take investments from accredited investors.
• Rule 504: For offerings up to $10 million. In most cases, issuers cannot advertise the offering to the general public.

For more on the difference between these first two options, check out our article: What is the difference between a Reg D 506(b) vs 506(c)?

While Regulation D dates back to the Securities Act of 1933, it became a more useful format for businesses in July of 2013 when the SEC issued new regulations under the JOBS Act which allowed businesses to advertise their private placement offering to the general public (which is specific to Rule 506c).

Businesses that want to utilize Reg D to raise capital must file Form D with the SEC within 15 days after the first sale of securities in the investment offering.