{"id":273,"date":"2013-10-01T10:30:59","date_gmt":"2013-10-01T15:30:59","guid":{"rendered":"http:\/\/www.accreditedinvestorleads.com\/?p=273"},"modified":"2020-01-22T11:31:20","modified_gmt":"2020-01-22T15:31:20","slug":"reg-d-rule-506b-or-506c","status":"publish","type":"post","link":"https:\/\/www.accreditedinvestorleads.com\/reg-d-rule-506b-or-506c\/","title":{"rendered":"Should You Use Reg D Rule 506b or 506c to Raise Capital?"},"content":{"rendered":"

The majority of capital raised through private offerings, also known as private placement memorandums, is done through Rule 506b or 506c of Reg D. Companies and Issuers like Rule 506b or 506c because it provides the ability to raise an unlimited amount of capital, allows for up to 35 non-accredited investors to participate, and is avoids Blue Sky laws.\u00a0 The benefits have made this an extremely attractive vehicle for raising capital, over $1 billion per year.<\/p>\n

The JOBS Act required the SEC to enact a regulation that would allow businesses to advertise their private offerings to Accredited Investors.\u00a0 This is designed to level the playing field between large hedge funds and non financial issuers, while exposing opportunity to investors that never would have seen it otherwise.\u00a0 It is a win-win for the investment and business community.\u00a0 The SEC passed this in July and on September 23rd<\/sup> Rule 506c was open for business.\u00a0 The challenge is the SEC has extended the comment period and is working out the final guidelines for Rule 506c.\u00a0 While technically companies should be able to advertise, there is a risk associated with doing something during this time period.\u00a0 Businesses who aren\u2019t careful may get caught in the political crossfire.<\/p>\n

Some guidelines are clear about Rule 506c<\/a>\u2026. at least for now.<\/p>\n