Rule 506(c) lets issuers publicly advertise private securities offerings, provided they verify that all investors are accredited—not just take their word for it.

How it works

A GP launches a fund website, posts on LinkedIn, or speaks at a public webinar inviting investment. That is general solicitation, which 506(b) forbids but 506(c) permits. Before accepting capital, the issuer must verify accreditation through methods the SEC considers reasonable: reviewing tax returns, CPA letters, brokerage statements, or using a verification service.

There is no cap on the number of accredited investors or raise size under 506(c), same as 506(b). Form D still gets filed. Many AngelList-style vehicles and emerging-manager newsletters rely on this path because distribution is part of the strategy.

Why it matters

• GPs: 506(c) unlocks marketing for first-time fund managers without a Rolodex of pension funds. Documentation and verification workflows become part of ops from day one.
• Investors: You will share financial proof or use a verifier. That friction protects both sides if the SEC asks questions later.
• Founders: Less common at company level, but some later-stage rounds use 506(c) when strategic outreach is broad.

Common mistake

Running a public “invest in our fund” campaign while only collecting checkbox self-certification. That fails 506(c)‘s verification standard and can force rescission offers or regulatory scrutiny.

Related ideas

Compare with 506(b), accredited investor tests, Form D, and syndicate platform compliance.