Regulation D
Definition
Regulation D is a set of SEC rules that lets companies raise money by selling securities without registering the offering with the SEC, provided they follow specific exemptions, most commonly Rule 506(b) or 506(c).
How it comes up in fundraising
Nearly every US startup financing, from a SAFE to a priced Series A, relies on Regulation D so the company can sell shares privately to investors without the cost and disclosure of a public offering.
Frequently asked questions
What is the difference between Rule 506(b) and 506(c) under Regulation D?
Rule 506(b) allows raising from an unlimited number of accredited investors plus a small number of sophisticated non-accredited investors, but bans general solicitation. Rule 506(c) allows public advertising of the raise, but every investor must be verified as accredited.
Does Regulation D mean a startup avoids all SEC involvement?
No, the company still must file a Form D with the SEC within 15 days of the first sale, even though the offering itself is exempt from full registration.
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