Reg D 506c and Reg D 506b compared with Reg A+

  • It is allowed for the issuing companies to promote and advertise their offerings far and wide with few limitations.
  • The issuer companies have to take steps to verify that the investors are actually accredited.
  • Although the companies don’t need to register with the SEC, they have to file a Form D, which includes information about the company’s offering, promotors, the companies themselves, and some further information about the offerings.
  • The company is limited to marketing its offering to people that it already knows are accredited investors. So general advertising and promotion is not allowed.
  • Investors are allowed to self-state that they are accredited.
  • Up to 35 non-accredited investors are allowed with certain steps taken to ensure they are aware of the risks they are taking by investing.
  • Although the companies don’t need to register with the SEC, they have to file a Form D, which includes information about the company’s offering, promotors, the companies themselves, and some further information about the offerings.
  • Anyone can invest, worldwide
  • The company can publicly advertise
  • No state registration required
  • Requires Audited Financials that go back up to two years
  • The company has to file a Form 1-A with the SEC and if the offering is Qualified by the SEC the company can start their online fundraising campaign which lasts for one year.
  • The company has to file annual US-GAAP audits and six-monthly Management Financials.
  • Privately in sales under the so-called “Section 4 (1 ½) exemption”, typically only to other accredited investors and on the basis of an opinion of counsel at any time;
  • Privately under Section 4(a)(7) of the Securities Act to accredited investors at any time;
  • Privately to “qualified institutional buyers” under Rule 144A at any time;
  • Publicly under Rule 144 one year after the securities were issued

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Rod Turner

Rod Turner

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Serial entrepreneur, leader, expert in mergers, scaling up businesses, Reg A+ & IPOs. Optimal health. CEO ManhattanStreetCapital.com