Description
“Small Businesses Are the Backbone of Our Economy and the Cornerstones of Our Communities”
The Regulation D exemption has been a crucial mechanism for companies raising capital without undergoing the burdensome process of full SEC registration. Since 2023, billions of dollars have been raised through this method, highlighting its significance in private capital markets. Notably, Rule 506(b) and Rule 506(c) are the two most widely used provisions under Regulation D:
- Rule 506(b), which prohibits general solicitation but allows an unlimited number of accredited investors and up to 35 non-accredited investors to participate, accounted for over $2.3 trillion in capital raised as of 2022.
- Rule 506(c) permits general solicitation but requires that all investors are accredited. This rule has grown in importance, raising $148 billion by 2022 under its conditions, which further increased the accessibility of private offerings.
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