Rule 506(c) offerings: advertising the raise and verifying buyers
Rule 506(c) allows general solicitation, so a company can promote its raise publicly, but every purchaser must be accredited and the issuer must take reasonable steps to verify that status. A data room can hold the public teaser on one side and keep the offering documents, verification files and subscriptions behind named, verified access.
- 3 monthsLook-back for a third-party verification letter under the rule's listed methods (17 CFR 230.506(c)(2)(ii)(C))
- $1MNet worth test for individuals, excluding the primary residence (17 CFR 230.501(a)(5))
Folder index
- 01 Public teaser Approved marketing summary that can be shared openly.
- 02 Offering memorandum PPM, risk factors, use of proceeds, terms.
- 03 Financials and plan Statements, projections with assumptions, cap table.
- 04 Company documents Charter or operating agreement, board approvals.
- 05 Business diligence Contracts summary, market data, team bios.
- 06 Verification Restricted: verification letters or reviewed documents per investor, kept by compliance only.
- 07 Subscription documents Subscription agreement, questionnaire, wire instructions.
How this raise works
Rule 506(c) was added in 2013 under the JOBS Act. It keeps the unlimited raise size of Regulation D but lets issuers advertise: websites, social posts, events and press. The trade-off is strict. Only accredited investors may buy, and a self-certification checkbox alone is not enough.
The rule lists non-exclusive ways to verify individuals: reviewing IRS forms for the income test, reviewing bank, brokerage and credit reports for the net worth test, or obtaining a written confirmation from a registered broker-dealer, an SEC-registered investment adviser, a licensed attorney or a certified public accountant who verified the buyer within the prior three months. Other reasonable methods are allowed; SEC staff guidance from 2025 discussed high minimum investment amounts combined with written representations as one route. Counsel should confirm the approach.
Verification documents are sensitive personal financial records. Keep them in a restricted folder visible only to the issuer's compliance team or the verification provider, never alongside offering materials that other investors can see.
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 19%
- Permission control 26%
- Raise workflow 21%
- Investor onboarding 19%
- Cost of a raise 16%
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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 -
One of the oldest deal rooms, common on bank-led transactions.
Price Priced on request Trial Demo on request 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 -
Easy, reliable deal room favored by mid-market advisers.
Price Priced on request 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 -
Deal room with a listed monthly price and an open API.
Price $299 a month Trial Free trial available Features 7 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: SmartRoom (7.1), DealRoom (7.0), ShareVault (6.9), Venue by DFIN (6.4), Digify (6.2), DocSend (5.9)
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 Public teaserApproved marketing summary that can be shared openly.
- 02 Offering memorandumPPM, risk factors, use of proceeds, terms.
- 03 Financials and planStatements, projections with assumptions, cap table.
- 04 Company documentsCharter or operating agreement, board approvals.
- 05 Business diligenceContracts summary, market data, team bios.
- 06 VerificationRestricted: verification letters or reviewed documents per investor, kept by compliance only.
- 07 Subscription documentsSubscription agreement, questionnaire, wire instructions.
- 08 ComplianceForm D, state notice filings, bad actor checks, advertising approvals.
- 09 Investor Q&AQuestions and approved answers.
Features this raise needs
| Feature | Why | Ellty | iDeals | Datasite | Ansarada | Intralinks | SecureDocs |
|---|---|---|---|---|---|---|---|
| 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. | ||||||
| 2-step verification | A code or an approval on a second device every time someone logs in. | ||||||
| Dynamic watermarks | Stamps the reader and a timestamp over every page, so a PPM that leaks carries its source with it. | ||||||
| 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. |
Setting up the room
- 01
Choose the verification method
Decide with counsel whether you will use third-party letters, document review or another reasonable method.
- 02
Approve public materials
Have counsel review every ad, post and teaser so marketing claims match the offering memorandum.
- 03
Gate full documents behind verification
Investors see the teaser first; offering documents open after NDA and the start of verification.
- 04
Restrict verification files
Store tax, bank and verification letters in a folder visible only to compliance.
- 05
Sign subscriptions after verification
Release the subscription agreement only once accredited status is verified.
- 06
File and retain
File Form D within 15 calendar days after the first sale and keep verification records with the offering file.
Common mistakes
- Relying on a self-certification checkbox alone as verification.
- Verification documents stored where other investors or staff can see them.
- Public marketing claims that go beyond what the offering memorandum says.
- Switching from 506(b) to 506(c) mid-raise without counsel's review of earlier sales.
Calculators for this raise
Or take the four-question quiz and check the raise checklist.
Questions and answers
What is the difference between 506(b) and 506(c)?
506(b) bans general solicitation but allows up to 35 non-accredited purchasers in a 90-day period. 506(c) allows general solicitation but every purchaser must be accredited and verified.
How do I verify accredited investors under 506(c)?
Common methods are a letter from a broker-dealer, registered investment adviser, attorney or CPA, or reviewing tax forms or asset and credit records. Counsel confirms what is reasonable for your offering.
Can I advertise my raise on social media under 506(c)?
Yes, general solicitation is allowed, but the content is still subject to antifraud rules and should match the offering documents.