Raising capital through a private offering can be a powerful growth lever—but only if it's done within the bounds of federal and state securities laws. For most fund managers, Regulation D offers a straightforward route forward, enabling the sale of securities without requiring SEC registration. But leveraging this exemption isn't automatic. It comes with defined limitations, disclosure requirements, and time-sensitive filings, including Form D.
Understanding how and when to rely on Regulation D—and filing Form D correctly—is critical. These steps help preserve compliance, reduce enforcement risk, and build trust with investors. At Fridman Law Firm, we help fund managers navigate the nuances of Reg D offerings with clarity and confidence.
Why Fund Managers Trust Fridman Law Firm With Reg D Compliance
Regulation D isn't just a checkbox—it's part of your capital-raising strategy. Our team helps clients use these exemptions as a tool, not a hurdle. We advise funds, syndicates, and private issuers on how to structure offerings, verify investor eligibility, and coordinate filings across federal and state lines.
At Fridman Law Firm, we assist with:
- Drafting offering documents and subscription agreements
- Preparing and filing Form D through the SEC's EDGAR system
- Evaluating whether Rule 506(b) or 506(c) fits your goals
- Managing Blue Sky compliance across investor jurisdictions
Our approach is responsive, strategic, and tailored to your timeline. Whether you're planning a one-time raise or managing ongoing capital commitments, we help ensure your offering is built on a sound legal foundation.
What Is Regulation D and Why It Matters
Regulation D is a set of exemptions under the Securities Act of 1933 that allows certain private offerings of securities to proceed without full SEC registration. For fund managers, this means the ability to raise capital from accredited investors with less cost, delay, and disclosure burden than public offerings.
There are three primary exemptions under Regulation D:
- Rule 504: Permits offerings up to $10 million in a 12-month period, with fewer restrictions but limited utility for most funds.
- Rule 506(b): The traditional path for private placements, allowing up to 35 non-accredited investors and unlimited accredited investors—provided general solicitation is avoided.
- Rule 506(c): Allows for public marketing of the offering, but all investors must be accredited and must be verified by the issuer.
Each rule carries its own compliance profile. Choosing the right one depends on your investor base, fundraising goals, and comfort with disclosure and verification requirements.
Understanding Rule 506(b): The Traditional Path to Private Capital
Rule 506(b) is the most commonly used Regulation D exemption for fund managers. It allows for the sale of an unlimited dollar amount of securities to an unlimited number of accredited investors—and up to 35 non-accredited investors—provided that no general solicitation or advertising is used.
This exemption is especially appealing for funds that already have investor networks or rely on warm introductions. Key features of Rule 506(b) include:
- No general solicitation: You cannot publicly promote the offering, post it online, or use mass outreach.
- Disclosure obligations: If you accept non-accredited investors, you must provide detailed financial disclosures and ensure the investor understands the risks.
- No cap on raise size: There's no dollar limit on how much you can raise, unlike under Rule 504.
- Bad actor disqualification: Certain criminal or regulatory histories among your officers, directors, or affiliates can make you ineligible.
Rule 506(b) remains a trusted route for many fund managers who want simplicity and control over their investor outreach strategy.
Exploring Rule 506(c): General Solicitation With Verification
Rule 506(c) opened new possibilities for capital raising by permitting general solicitation and advertising of private offerings. However, it also imposed a higher standard: every investor must be accredited, and the fund manager must take “reasonable steps” to verify that status.
What Counts as General Solicitation?
General solicitation includes any public communication intended to promote the offering. Examples include:
- Public posts on social media or websites
- Email campaigns to broad lists
- Speaking engagements or webinars that include investment details
If you plan to market your fund in this way, Rule 506(c) is the appropriate exemption—but you must follow its rules closely.
Investor Verification Requirements
Unlike Rule 506(b), which allows self-certification, Rule 506(c) requires objective verification. Common methods include:
- Reviewing tax returns or W-2s to confirm income
- Examining bank statements or brokerage records for net worth
- Obtaining written confirmation from a licensed professional (e.g., CPA or attorney)
Verification must be documented and retained. It cannot rely solely on a check-the-box form. This makes early coordination with legal counsel essential.
At Fridman Law Firm, we help clients evaluate whether 506(c) is the right path and ensure that verification procedures align with regulatory expectations without creating unnecessary friction in the investor onboarding process.
Note that a March 2025 rule change makes Rule 506(c) more accessible by allowing issuers to rely on high minimum investment, simple self-certification, and lack of contradictory information as sufficient verification. While the traditional documentation methods remain available, this streamlined approach is far less cumbersome, potentially boosting the use of public marketing in private offerings, which has, in the past, limited the dollar amount raised on 506(c) compared to that of 506(b).
Form D: What It Is and When to File
Form D is a notice filing that must be submitted electronically to the SEC via the EDGAR system when relying on Regulation D exemptions—specifically Rules 504, 506(b), or 506(c). While not an approval or registration, Form D serves as a public record of the offering and satisfies federal notice obligations.
Form D requires disclosure of:
- The issuer's name and principal location
- The total amount offered and sold
- Use of proceeds
- Names and roles of related persons (e.g., executive officers, promoters)
- The exemption being relied upon
- Any commissions or fees paid to intermediaries
Filing Deadlines and Amendments
Form D must be filed within 15 calendar days of the first sale of securities. Failure to file on time may not invalidate the exemption, but it can draw SEC attention and raise concerns among potential investors.
You must also file an amended Form D if:
- The offering size changes significantly
- The offering closes
- Material information reported in the original filing changes
We assist clients in preparing and submitting Form D with accuracy and efficiency, ensuring that these filings reflect your offering's structure and timeline.
How State Blue Sky Laws Interact With Reg D Offerings
Many fund managers are surprised to learn that Regulation D exemptions do not preempt all state-level obligations. While federal law limits states from imposing their own registration requirements, most states still require notice filings, fees, and in some cases, the submission of offering materials.
State filings must generally be made in:
- The issuer's state of incorporation
- Any state where securities are offered or sold
- Any state where investors reside
Each jurisdiction sets its own deadlines, forms, and fees. Some require filings concurrent with Form D submission, while others impose different standards. Failing to comply can result in enforcement actions or disqualification from future offerings in that state.
We help clients coordinate these filings proactively, managing multi-state compliance without unnecessary administrative burden.
Common Compliance Mistakes and How to Avoid Them
Even well-prepared fund managers can fall into avoidable compliance traps when relying on Regulation D. Some of the most frequent missteps include:
Missing the Form D Filing Deadline
Many managers overlook the 15-day deadline after the first investor check clears. This delay is often unintentional but still raises compliance concerns.
Inadequate Documentation for Rule 506(c) Verification
Assuming investor self-certification is sufficient under Rule 506(c) can expose you to enforcement risk. Verification must be independent and documented.
Failing to File State Blue Sky Notices
Ignoring or delaying required state-level filings can trigger administrative penalties or future offering restrictions in those states.
Mislabeling the Offering Exemption
Some managers mistakenly cite the wrong exemption on Form D or use outdated offering documents that contradict the filing. Consistency across all offering materials is critical.
We work closely with clients to build a compliance timeline, review offering language, and coordinate filings so these issues never arise.
How Fridman Law Firm Supports Capital-Raising Strategy
We provide comprehensive, end-to-end legal support for fund managers raising capital under Regulation D. Our approach is hands-on, tailored, and built to move at the speed of your business. Whether you are raising your first fund or managing a recurring offering schedule, we ensure your structure, filings, and communications align with both regulatory requirements and investor expectations.
Our services include:
- Offering structure and exemption analysis: We help you determine whether Rule 506(b), 506(c), or another exemption fits your goals, timeline, and investor base. This includes strategic planning around general solicitation, accredited investor requirements, and long-term capital strategy.
- Drafting and reviewing offering materials: We prepare private placement memoranda (PPMs), subscription agreements, investor questionnaires, and side letters—ensuring that all documents are consistent, accurate, and tailored to your offering.
- Form D preparation and EDGAR submission: We manage the drafting, review, and filing of Form D through the SEC's EDGAR system, ensuring compliance with the 15-day filing deadline and coordinating amendments as needed.
- Blue Sky notice filings: We handle required state-level filings and fee coordination for every jurisdiction where your securities are offered or sold—ensuring full compliance with local notice and fee requirements.
- Investor verification and communication strategy: For Rule 506(c) offerings, we advise on reasonable verification procedures, draft supporting documentation, and review onboarding processes to ensure clear, compliant investor communications.
We also help clients evaluate when to switch exemptions, coordinate parallel offerings, and prepare for investor due diligence or SEC inquiries by maintaining strong compliance records from the outset.
At Fridman Law Firm, we focus on making capital-raising smooth, strategic, and fully defensible. By removing regulatory friction and streamlining execution, we help you raise funds with confidence and stay focused on your investment mission.
Confident, Compliant, and Ready to Raise
Raising capital under Regulation D offers fund managers speed, flexibility, and privacy—but only when the legal details are handled with care. From choosing the right exemption to managing Form D and state-level filings, each step plays a role in maintaining compliance and investor trust.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
