Leverage general solicitation to raise capital publicly while ensuring strict compliance with SEC accredited investor verification rules.
Rule 506(c) of Regulation D has revolutionized private capital markets by allowing issuers to use “general solicitation”—meaning you can advertise your fund or syndication online, on podcasts, and through social media. However, this powerful marketing tool comes with a strict regulatory trade-off: you are legally required to take “reasonable steps to verify” that every participating investor is accredited.
At Ishimbayev Law Firm, we help sponsors, founders, and fund managers navigate the complexities of a 506(c) offering. We build the complete legal architecture, ensure your marketing materials comply with anti-fraud provisions, and implement frictionless verification workflows to secure your capital raise.
Drafting the Private Placement Memorandum (PPM), Term Sheet, and Subscription Agreements specifically tailored for a 506(c) general solicitation environment.
Reviewing your pitch decks, website landing pages, webinars, and advertising copy to ensure they do not violate Rule 10b-5 anti-fraud standards.
Establishing compliant workflows to verify accredited status, whether through reviewing tax returns (W-2s/K-1s), bank statements, or coordinating third-party reliance letters from CPAs and attorneys.
Managing the subscription intake, resolving verification discrepancies, and executing final closing mechanics and restrictive legend placements.
We evaluate your marketing plan to confirm that 506(c) is the right fit and structure the terms to appeal to your target accredited audience.
We draft the core offering documents while simultaneously providing legal clearance for your digital marketing campaigns.
We integrate secure verification processes into your investor onboarding, handle the closing documentation, and prepare the mandatory Form D filings.
We do not just tell you what you cannot say; we help you find the compliant way to market your deal. We provide clear guardrails so you can promote your offering aggressively without triggering SEC enforcement.
Clunky verification processes kill deals. We design onboarding workflows that satisfy the SEC’s “reasonable steps” requirement while remaining intuitive and professional for your high-net-worth investors.
If you are an Exempt Reporting Adviser (ERA) or RIA, your 506(c) advertising must also comply with the SEC’s modernized Marketing Rule. We ensure cross-compliance across all regulatory frameworks.
Failing to properly verify even one unaccredited investor in a 506(c) raise can destroy the entire exemption, forcing you to return capital. Our rigorous oversight protects the sponsor from catastrophic legal and financial liability.
Under 506(b), you cannot advertise your offering publicly and must have a pre-existing relationship with investors, but investors can simply self-certify their accredited status. Under 506(c), you can advertise to the general public, but you must actively prove and document that every single investor is accredited.
The SEC provides a non-exclusive list of “reasonable steps.” This typically involves reviewing the investor’s tax returns for the past two years, pulling credit reports and bank statements to verify net worth, or obtaining a written confirmation letter from the investor’s licensed CPA, attorney, or broker-dealer.
It is possible to transition, but it requires careful legal navigation. Once you engage in general solicitation, you cannot easily switch back to 506(b) for the same offering. We advise on integration rules and “cooling-off” periods to prevent overlapping exemptions.
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