Rule 506(c) of Regulation D allows companies to raise an unlimited amount of capital from an unlimited number of accredited investors. The primary SEC-regulated rules for this type of investment offering are:
1. Issuers are allowed to advertise the offering to the general public.
2. Securities must be sold to accredited investors only.
3. Issuers must take reasonable steps to formally verify the accredited status of the investor
- This is a key difference from Rule 506(b) where investors go through a simplified process where they attest to their accredited investor status
4. Certain other conditions must also be satisfied that relate back to the broader scope of Regulation D.
View Full Answer Page: What is Rule 506(c)?