506(b) or 506(c): choose once, choose right.
Here is the kicker most first-time sponsors miss: your exemption decides who you can legally take money from and how loudly you can talk about the raise, and switching mid-raise means rebuilding documents. The choice belongs at structure time, on day one.
Rule 506(b): relationships, quietly
Raise from investors you have a pre-existing relationship with. No general solicitation, no public advertising. Up to 35 sophisticated non-accredited investors may participate alongside unlimited accredited investors, which is why friends-and-family capital usually lives here.
Rule 506(c): advertise, but verify
Market the offering publicly, on LinkedIn, at events, anywhere, but every investor must be accredited and you must take reasonable steps to verify it (not just a checkbox). Built for sponsors whose capital comes from outreach rather than an existing book.
How to choose in one question
Where is the money actually coming from? If it is people who already know you, 506(b) preserves the non-accredited allowance. If you need to find investors publicly, 506(c) is the only compliant path. We structure the entity, PPM, and subscription documents for the right rule on day one, so the raise never has to stop and re-paper.
Scope of work
Straight answers.
The questions dealmakers ask about this before they book.
Moving to 506(c) after generally soliciting can be done prospectively but is messy: documents change, verification obligations begin, and prior non-accredited allowances end. Choosing correctly at structure time avoids the rebuild.
Yes. Accredited-only means you qualify for an exemption path, not that the securities laws stop applying. Filings such as Form D still trigger at launch and first close.
Up to 35, and they must be sophisticated, with no public advertising anywhere in the raise.
Here is how we structure it.
Entity, offering documents, CFA-built model, data room, then debt and equity introductions. Flat fee, no percentage of your raise. Map your deal on a strategy call.