What Accredited Investors Should Know About Rule 506(c)

What Rule 506(c) is

Rule 506(c) is an exemption under Regulation D that lets a private fund raise capital without registering the offering with the SEC, while still following important investor-protection rules.

Public marketing is allowed

Unlike the older, quieter private-placement approach, 506(c) permits general solicitation — a fund can have a public website and talk openly about the opportunity. That is why this website can exist.

But only accredited investors can invest

The trade-off is that every investor must be an accredited investor, and the fund must take reasonable steps to verifythat status — not simply take the investor’s word for it. Accreditation is generally based on income, net worth, or certain professional credentials.

How verification differs

In a 506(c) offering, self-certifying that you are accredited is not enough. Expect to provide documentation — such as financial information or a letter from a qualified third party (for example, a CPA, attorney, or registered adviser) — as part of onboarding.

What you’ll be asked for

After you express interest, the verification process collects the information needed to confirm eligibility. Sensitive financial details should be shared only through a secure process, not by ordinary email or a web form.

Why it protects everyone

Verification keeps a publicly marketed private offering limited to investors who meet the eligibility standards, which is central to how 506(c) is intended to work.