Rule 506(b)
Rule 506(b) is the most used exemption in Regulation D. You can raise any amount from accredited investors and a limited number of sophisticated non-accredited investors, as long as you don’t advertise.
Last reviewed November 2026
The requirements
- No dollar limit.
- Accredited investors: unlimited.
- Non-accredited investors: up to 35 in any 90 calendar days. Each must have enough knowledge and experience in financial and business matters to evaluate the investment, alone or with a purchaser representative.
- No general solicitation or general advertising.
- Disclosure: if any non-accredited investor buys, they must receive the information in Rule 502(b), including financial statements, a reasonable time before the sale.
- Form D within 15 calendar days after the first sale.
- Restricted securities and the issuer’s reasonable care against resale.
- No bad actors among the issuer and its covered persons. See the bad actor rules.
Finding investors without advertising
The general solicitation ban is the heart of Rule 506(b). The usual way to comply is to offer only to people you have a pre-existing, substantive relationship with:
- Pre-existing means the relationship began before the offering did.
- Substantive means you know enough about the person’s finances and experience to judge whether they are accredited or sophisticated.
- A registered broker-dealer or investment adviser can bring its existing relationships to your offering.
Public websites, social media posts and open events about the offering are general solicitation. If you want to market openly, use Rule 506(c).
Accredited only, or include non-accredited investors?
Including even one non-accredited investor triggers Rule 502(b): offering-circular-level disclosure, financial statements (audited for offerings over $20 million) and a sophistication judgment for each person. That’s why most Rule 506(b) offerings sell only to accredited investors.
Our Rule 506(b) templates are written for offerings sold only to accredited investors. If you plan to include non-accredited investors, your attorney will need to add the Rule 502(b) information.
State law
Securities sold under Rule 506 are “covered securities” under Section 18 of the Securities Act. States can’t require registration or review the merits, but they can require a notice filing, a fee and consent to service of process, and they keep their antifraud authority. Read about state notice filings.
Changing course mid-offering
If you start under Rule 506(b) and later decide to advertise, you can generally continue under Rule 506(c) for later sales, as long as every purchaser from that point is a verified accredited investor. Moving the other way is much harder, because investors reached through advertising can’t be included in a Rule 506(b) offering.
Capital raising made easy.
Pick a template and a kit. Every kit includes the PPM, subscription agreement, investor questionnaire and state legends, and we file your Form D and Blue Sky notices.