Strategies for Combining Regulation D 506b and Regulation D 506c Offerings

Tilden Moschetti, an attorney for the Moschetti Syndication Law Group, discusses the question of whether a syndicator can do both a Rule 506b offering (to include non-accredited investors) and a Rule 506c offering (for advertising purposes) at the same time. The answer is complex and depends on the specifics of the strategies used.

In general, Rule 506b allows up to 35 non-accredited investors in your syndication over a 90-day period but prohibits general solicitation. In contrast, Rule 506c permits general solicitation, even to unknown investors.

Syndicators often wish to combine both rules to attract as much capital as possible from both non-accredited investors they know and the general public. However, Moschetti explains that this approach has several pitfalls.

First, executing a Rule 506b and Rule 506c offering simultaneously is not allowed, as it would evade the prohibition on general solicitation. 

Second, performing a Rule 506c offering, closing it, and then initiating a Rule 506 B offering is also non-compliant, as it similarly circumvents the rules.

The third strategy Moschetti proposes involves starting with a Rule 506b offering, taking no action to advertise, and bringing in only those individuals with whom the syndicator has a personal relationship. Once the Rule 506b offering is closed, the syndicator could initiate a Rule 506c offering, allowing them to advertise to the general public. This approach might be acceptable if well-documented, but any non-accredited investor entering the 506c offering would violate the rules, collapsing the entire arrangement.

If you are ready to schedule a free consultation with an attorney for your syndication, go to https://www.moschettilaw.com/schedule-a-consultation/.

Read more about Reg D Rule 506b - Rule 506b of Reg D: Non-Accredited Investors & No Solicitation: https://www.moschettilaw.com/rule-506b-of-reg-d/

Read more about Reg D Rule 506c - Rule 506c of Reg D – Solicitation & No Non-Accredited Investors: https://www.moschettilaw.com/rule-506c-of-reg-d/

👇 SUBSCRIBE TO THE MOSCHETTI SYNDICATION LAW GROUP YOUTUBE CHANNEL NOW 👇
https://www.youtube.com/channel/UCVh1CNQULC45Bh6j4WV2sjA?sub_confirmation=1

Check out these Top Trending Blog Articles – 
1.) What is Reg D? The King of Securities Exceptions - https://www.moschettilaw.com/reg-d/
2.) What is Syndication? Raising Outside Capital For Investment - https://www.moschettilaw.com/syndications-and-funds/
3.) Private Placement Memorandums for Syndications and Funds - https://www.moschettilaw.com/private-placement-memorandum-attorney/
4.) Real Estate Syndication: Raising Investment Capital For Properties - https://www.moschettilaw.com/real-estate-syndication/

Moschetti Syndication Law Group is a boutique syndication law firm, serving small and growth-bound syndicators, and well as private equity firms. We keep our firm ‘boutique’ size so we can tailor the services to each client’s unique needs without turning the firm into a faceless factory or passing unnecessary overhead expenses onto our clients. (As our client, you’ll only pay a fixed fee, so no surprises.) As for the client experience, we give real-time answers without making you book an official appointment. And we’ll work with your ambitions and overall vision to help you close the current deal and fill-in that ‘missing’ piece - whatever you need - to keep adding more syndications to your portfolio. We keep syndicators syndicating (TM).

★☆★ CONNECT WITH THE MOSCHETTI SYNDICATION LAW GROUP ★☆★
YouTube: https://www.youtube.com/channel/UCVh1CNQULC45Bh6j4WV2sjA?sub_confirmation=1
Facebook: https://www.facebook.com/syndication.attorneys/
LinkedIn: https://www.linkedin.com/company/moschettilaw
Messenger: https://m.me/tildenm
Web: https://www.moschettilaw.com

#Syndication #PrivatePlacementMemorandum #PPM

------Disclaimer------

Also, please note, this video and any content from Moschetti Syndication Law Group, Tilden, or anyone affiliated with either or both, does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.  Information from these online sources may not constitute the most up-to-date legal or other information.

No viewer, user, or browser of content from us should act or refrain from acting on the basis of information on this site without first seeking legal advice from counsel in the relevant jurisdiction. Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.