Rule 506(b) offerings: running a private data room
Rule 506(b) lets a company raise any amount privately from accredited investors, plus up to 35 non-accredited but sophisticated purchasers in any 90-day period, as long as it does not use general solicitation. A data room fits well: invitation-only access, an NDA gate, tracked reading and a subscription pack, with no public page that advertises the offering.
- 35Non-accredited purchasers allowed in any 90-calendar-day period under Rule 506(b); accredited buyers are unlimited (17 CFR 230.506(b))
- 15 daysDeadline to file Form D after the first sale (17 CFR 230.503)
Folder index
- 01 Offering summary Term summary, offering size, minimum investment, closing timeline.
- 02 Offering memorandum PPM or summary memorandum, risk factors, use of proceeds.
- 03 Financial statements Statements and, if non-accredited buyers participate, the financial information Rule 502(b) calls for.
- 04 Company documents Charter, bylaws, operating agreement, board approval of the offering.
- 05 Business materials Deck, plan, market data, key contracts summary.
- 06 Subscription documents Subscription agreement, investor questionnaire, accredited status confirmation.
- 07 Compliance Bad actor questionnaires, Form D copy, state notice filings.
How this raise works
Rule 506(b) of Regulation D is the most used private offering safe harbor in the US. There is no cap on the amount raised. Sales to accredited investors carry no prescribed disclosure, but if any non-accredited purchaser buys, the issuer must give those buyers disclosure documents and financial statements similar to what a registered offering would include, and each non-accredited buyer must be sophisticated, alone or with a purchaser representative. For that reason many issuers sell to accredited investors only.
The defining limit is the ban on general solicitation. Offers usually go to people with whom the company, its founders or its broker-dealer have a pre-existing, substantive relationship. A public landing page, open social posts about the raise or an unrestricted link to the deck can count as general solicitation and break the exemption.
After the first sale the issuer files a notice on Form D with the SEC within 15 calendar days, and usually makes notice filings in the states where buyers live. The issuer must also confirm that no covered person is subject to a bad actor disqualification under Rule 506(d).
Best data rooms for this raise
The 16 rooms re-ranked with this raise's weights. Permission control carries the most weight here.
- Investor tracking 21%
- Permission control 24%
- Raise workflow 21%
- Investor onboarding 17%
- Cost of a raise 17%
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Full deal room with AI, a listed price and a 14-day free trial.
Price $149 a month Trial 14-day free trial Features 8 of 12 listed -
Long-running M&A platform with layered permissions and fast support.
Price Priced on request Trial Free trial available Features 9 of 12 listed -
Bank-grade platform for large processes, with AI and a mobile app.
Price Priced on request Trial Demo on request Features 10 of 12 listed -
Deal room with AI and readiness tools for preparing a process.
Price Priced on request Trial Free trial available Features 8 of 12 listed -
Simple flat-rate deal room with signing and Q&A.
Price $250 a month Trial Free trial available Features 8 of 12 listed -
One of the oldest deal rooms, common on bank-led transactions.
Price Priced on request Trial Demo on request Features 8 of 12 listed -
Easy, reliable deal room favored by mid-market advisers.
Price Priced on request Trial Free trial available Features 7 of 12 listed -
Deal room with a listed monthly price and an open API.
Price $299 a month Trial Free trial available Features 7 of 12 listed -
Content cloud with watermarks and signing, priced per user.
Price $15 a user a month Trial Free trial available Features 9 of 12 listed -
European deal room strong in real estate, with AI features.
Price Priced on request Trial Demo on request Features 8 of 12 listed
Places 11 to 16: DealRoom (7.0), SmartRoom (7.0), ShareVault (6.8), Venue by DFIN (6.4), Digify (6.3), DocSend (6.0)
Folder index for the room
A starting index for this raise. Number the folders so the order survives exports and investors can cite them in questions.
- 01 Offering summaryTerm summary, offering size, minimum investment, closing timeline.
- 02 Offering memorandumPPM or summary memorandum, risk factors, use of proceeds.
- 03 Financial statementsStatements and, if non-accredited buyers participate, the financial information Rule 502(b) calls for.
- 04 Company documentsCharter, bylaws, operating agreement, board approval of the offering.
- 05 Business materialsDeck, plan, market data, key contracts summary.
- 06 Subscription documentsSubscription agreement, investor questionnaire, accredited status confirmation.
- 07 ComplianceBad actor questionnaires, Form D copy, state notice filings.
- 08 Investor Q&AQuestions and answers shared with all offerees.
- 09 ClosingCountersigned subscriptions, funds receipt records, updated cap table.
Features this raise needs
| Feature | Why | Ellty | iDeals | Datasite | Ansarada | SecureDocs | Intralinks |
|---|---|---|---|---|---|---|---|
| Investor activity log | A per-investor record of opens, pages and minutes, which tells the IR team who is in diligence and who stalled. | ||||||
| NDA e-sign step | Confidentiality terms an investor must accept in the room before folder one appears. | ||||||
| Q&A module | LPs and lead investors post questions on a file; the deal team routes each one, drafts a reply and decides who sees it. | ||||||
| Dynamic watermarks | Stamps the reader and a timestamp over every page, so a PPM that leaks carries its source with it. | ||||||
| 2-step verification | A code or an approval on a second device every time someone logs in. |
Setting up the room
- 01
Confirm the exemption with counsel
Agree that 506(b) fits, whether any non-accredited buyers will be accepted, and run bad actor checks on covered persons.
- 02
Build an invite-only list
List offerees with whom the company or its agent has a substantive relationship and record how each was met.
- 03
Gate the room
No public link. Each offeree gets a named invite, accepts the NDA and sees the same offering materials.
- 04
Collect questionnaires
Subscription agreement and investor questionnaire signed in the room, with accredited status confirmed.
- 05
File Form D on time
Within 15 calendar days after the first sale, then state notice filings where required.
- 06
Keep the offering record
Store the offeree list, access log and signed documents for the life of the company.
Common mistakes
- A public deck link or social post about the raise, which can be general solicitation.
- Admitting a non-accredited purchaser without the required disclosure package.
- Missing the 15-day Form D deadline or the state notice filings.
- No record of how each offeree was approached.
Calculators for this raise
Or take the four-question quiz and check the raise checklist.
Questions and answers
How much can a company raise under Rule 506(b)?
There is no dollar limit. The limits are on how investors are found, with no general solicitation, and on non-accredited purchasers.
Can I post my 506(b) data room link publicly?
Avoid it. A publicly available offer can count as general solicitation, which 506(b) does not allow. Use named invites to people you have a relationship with.
Do I have to verify accredited status under 506(b)?
The rule relies on a reasonable belief rather than the verification steps 506(c) requires. Issuers commonly use a signed investor questionnaire.
What is Form D?
A short notice filed with the SEC after the first sale in a Regulation D offering, giving basic facts about the issuer and the offering.