What is Regulation D?
Regulation D is a set of SEC rules that exempts certain private placements from full registration. It's the most heavily-used securities exemption in the United States — by some estimates, more capital is raised under Reg D each year than through traditional IPOs.
Reg D contains several rules, but two matter most for founders: Rule 506(b) and Rule 506(c). Both allow unlimited capital raises from accredited investors. The key difference is whether you can publicly market the offering.
Why Reg D dominates
Reg D is fast (filing happens after the first sale), inexpensive (no SEC review), and unlimited in size. It's the default for venture rounds, real estate deals, fund formation, and SPVs. The tradeoff: you generally must limit your investors to accredited individuals and entities.
Rule 506(b) vs. Rule 506(c).
- Up to 35 sophisticated non-accredited investors permitted (rarely used).
- Unlimited accredited investors.
- Self-certification of accredited status acceptable.
- No general solicitation or advertising.
- Investors must have a pre-existing relationship.
- Best for: friends-and-family, traditional venture rounds.
- Accredited investors only — no non-accredited allowed.
- Unlimited investor count.
- General solicitation and advertising permitted.
- You can post on social media, run ads, list on platforms.
- Must take "reasonable steps" to verify accredited status.
- Best for: online raises, SPVs, syndications.
Who is an accredited investor?
Under SEC rules, an individual qualifies as accredited if they meet any one of the following:
- Income: $200,000+ individual income (or $300,000+ joint with spouse) for the last two years, with reasonable expectation of the same in the current year.
- Net worth: Net worth of $1 million or more, excluding primary residence.
- Professional credentials: Hold a Series 7, 65, or 82 license in good standing.
- "Knowledgeable employees" of the issuing private fund.
Entities qualify as accredited under separate criteria, including: banks, registered investment companies, certain trusts, entities with $5M+ in assets, and entities owned entirely by accredited individuals.
Verifying accredited status
For Rule 506(b), self-certification is acceptable — investors check a box. For Rule 506(c), you must take "reasonable steps" to verify, which typically means:
- Reviewing tax returns or W-2s (for income test).
- Reviewing bank, brokerage, or other financial statements (for net worth test).
- Obtaining a written confirmation from a registered broker-dealer, investment adviser, attorney, or CPA.
- Using a third-party verification service (VerifyInvestor, EarlyIQ, etc.).
The Reg D process.
Choose your rule: 506(b) or 506(c)
The choice depends on how you'll find investors. If you have a network and can avoid public marketing, 506(b) is simpler. If you need to advertise — including on social media — 506(c) is required.
Structure the offering
We help you choose the right security — equity, SAFE, convertible note, LP/LLC interests for funds — and structure terms appropriate for your stage and goals.
Draft offering documents
For most Reg D offerings: subscription agreement, investor questionnaire, and (often) a Private Placement Memorandum (PPM) or term sheet. For funds: Limited Partnership Agreement, PPM, and subscription documents.
Begin accepting investments
Once docs are ready, you can start signing investors. Importantly — unlike Reg CF or Reg A+ — there's no waiting period or pre-filing requirement.
File Form D with the SEC
Form D must be filed with the SEC within 15 days after the first sale of securities. We handle the filing via EDGAR. State Blue Sky notice filings may also be required where investors reside.
Close & ongoing administration
Closings can happen on a rolling basis or at a single date. We help with cap table updates, investor onboarding, and any amendments to Form D required as the offering progresses.
Common Reg D use cases.
Venture rounds
Seed through Series D and beyond. SAFEs, convertible notes, and priced rounds. The default exemption for nearly every venture-backed company.
SPVs & syndicates
Single-purpose vehicles for one-off deals. AngelList syndicates, micro-funds, and special-purpose investment entities. Almost always 506(c).
Real estate syndications
From single properties to large portfolios. Reg D is the dominant exemption for real estate sponsors and operators.
Private fund formation
Venture funds, hedge funds, private equity funds. Reg D pairs with Section 3(c)(1) or 3(c)(7) of the Investment Company Act to enable fund structures.
Reg D vs. other exemptions.
| Feature | Reg D 506(c) | Reg D 506(b) | Reg CF |
|---|---|---|---|
| Max raise | Unlimited | Unlimited | $5M |
| Accredited only | Yes | Mostly (35 non-acc max) | No |
| General solicitation | Yes | No | Yes |
| Pre-existing relationship | Not required | Required | Not required |
| SEC review | No | No | No |
| Filing timing | 15 days after first sale | 15 days after first sale | Before campaign |
| Time to launch | 1–2 weeks | 1–2 weeks | 2–4 weeks |
| Typical cost | $15K – $50K | $10K – $40K | $10K – $25K |
Is Reg D right for you?
Reg D is the right answer for nearly any private capital raise targeting accredited investors. If your investors are wealthy individuals, family offices, institutions, or other funds — and you don't need non-accredited participation — Reg D is almost certainly the path.
Common pitfalls & how to avoid them.
- Accidental general solicitation under 506(b). A single tweet, podcast appearance, or Demo Day pitch can blow up a 506(b) offering. If you're going public at all, use 506(c).
- Inadequate verification under 506(c). Self-certification is not enough for 506(c). You need actual documentation or third-party verification.
- Late or missing Form D. Form D must be filed within 15 days of the first sale. Late filings can affect your ability to use Reg D in future raises.
- Forgetting state Blue Sky filings. While Reg D preempts state registration, most states still require notice filings and fees. We track these for you.
- Bad actor disqualification. Certain criminal convictions, regulatory orders, or SEC sanctions against company affiliates can disqualify you from Reg D entirely. We screen this upfront.