Reg D Crowdfunding
Reg D crowdfunding allows you to raise capital without registering it with the SEC. Regulation D gives issuers an exemption from registration. Typically, this process is done following rule 506(b) or rule 506(c).
Both of these rules do not put any limits on what you invest within a year. Investors can put an unlimited dollar amount into the investment vehicle without repercussion. Rule 506(b) does not allow for general solicitation, so if you need that, go with rule 506(c). Both rules have bad actor disqualifications for the issuer requirements.
Both rules allow unlimited accredited investors to participate. However, rule 506(b) allows for 35 sophisticated investors. These sophisticated investors do not need to be accredited if you follow the 506(b) rules. In both situations, there are restrictions on what and when you can resale. Issued securities must be held for a minimum of one year before selling them. Plus, you need to have a legal option to execute the sale.
Since you can solicit funds using 506(c), there is a lot more that you can do with that path. If all the investors have their accreditation, they can be from a solicitation. You can advertise through brochures, posters, social media, and print media.
Software Based Reg D
If you want to crowdfund an investment, use a platform with the following benefits:
- Regulation D 506(b) and 506(c) Offerings
- Accredited Investor Checks
- Escrow Funds and Handling
- Share Issuance and Distribution
- Form D & Blue Sky Compliance
Contact EquityTrack at https://www.equitytrack.co/.
