Regulation D
The US exemption most private funds use to raise money without registering the offering.
Under Rule 506(b) a manager may not advertise or solicit the general public, and it raises from accredited investors plus a few sophisticated ones. Under Rule 506(c) it may advertise publicly, but every investor must be accredited and the manager must take reasonable steps to verify that. Both need a Form D filing after the first sale.
Rule 506(b) allows up to 35 non-accredited but sophisticated investors, though including any triggers heavier disclosure requirements, so most funds accept only accredited investors. Rule 506(c) permits general solicitation, such as public posts about the fund, but the manager must take reasonable steps to verify accreditation.
In March 2025, SEC staff guidance indicated that a high minimum investment, $200,000 for individuals and $1M for entities, combined with written representations from the investor, can count as a reasonable verification step under 506(c). Before relying on it, managers should confirm the details with counsel.
Worked example
A GP posts its Fund I track record and target size on a public social media profile and speaks about the fund at an open conference. That is general solicitation, so the fund relies on Rule 506(c) and verifies every investor's accredited status, for example through tax returns, a letter from an accountant or lawyer, or the high minimum investment approach.
Common questions about Regulation D
What is the difference between 506(b) and 506(c)?
Under 506(b) a fund cannot advertise or generally solicit, and investors self-certify their status. Under 506(c) it can advertise publicly, but every investor must be accredited and the manager must take reasonable steps to verify it.
Can a fund under 506(b) post about its raise on social media?
Generally no. Publicly promoting the offering is general solicitation, which 506(b) prohibits. Talking about the firm without offering the fund may be acceptable, but the line is fine and worth checking with counsel.