Who Just RaisedRule 506(b) vs 506(c)
Both let a company raise an unlimited amount privately without registering with the SEC. The difference is whether it is allowed to talk about the round in public — which matters to anyone who wants to invest in one, or sell to the company raising it.
| Rule 506(b) | Rule 506(c) | |
|---|---|---|
| Can advertise the offering publicly | No | Yes |
| Non-accredited investors | Up to 35, with disclosures | None: all must be accredited |
| Checking investors are accredited | Self-certification is usual | Reasonable verification required |
| Share of recent raises here | 94% (2,101) | 6% (141) |
What the numbers say
Of the 2,242 raises on this site that claimed one of the two rules, 94% used 506(b) — the quiet route. That is the single most useful thing to know about Form D as a source: the overwhelming majority of these companies are not allowed to publicise the round, which is exactly why so few of them turn up in the press. 165 filings reported including at least one non-accredited investor.
Why it matters if you are selling
It does not change whether you can contact the company about your product — that is ordinary business. It does mean the round itself is usually not public knowledge, so "congratulations on the round" may be news to them, and in a 506(b) offering it is not something they advertised.
Why it matters if you are investing
A 506(c) offering is the one that can be marketed openly, so those are the rounds most likely to welcome an approach from an investor who was not already known to the company. Where a filing states a minimum investment, it is shown on the raise, and you can filter for open rounds with a small minimum.
This is a description of what the filings say, not legal advice.