Learn the key differences between Regulation D Rule 506(b) and 506(c) offerings and how to choose the right one for your syndication. To get started with your syndication or fund visit [ Ссылка ]

Understanding the distinctions between Regulation D Rule 506(b) and 506(c) is crucial for anyone involved in real estate syndications or private offerings. Rule 506(b) allows for raising an unlimited amount of capital from an unlimited number of accredited investors, with the added flexibility of including up to 35 non-accredited investors within any 90-day period. This option, however, requires a pre-existing substantive relationship with each investor, as public advertising is not permitted.

Conversely, Rule 506(c) also permits raising unlimited funds from accredited investors but mandates a strict verification process to ensure investor accreditation. The primary advantage of Rule 506(c) is the ability to engage in general solicitation and advertising, broadening the potential investor pool. The choice between these rules hinges on the source of potential investors. If a substantial network of accredited investors with whom there is an established relationship exists, Rule 506(b) might be more straightforward and less cumbersome. However, if reaching a wider audience through advertising is necessary, Rule 506(c) becomes the preferred route despite the added step of third-party investor verification.

Chapters:
0:00 Introduction to Regulation D Rules
0:27 Common Question: 506(b) vs. 506(c)
0:47 Basics of Rule 506(b)
1:07 Basics of Rule 506(c)
1:45 Importance of Investor Relationships in 506(b)
2:22 Determining Investor Sources
3:09 Benefits and Requirements of Rule 506(b)
3:26 Verification Process in Rule 506(c)
4:22 Choosing the Right Rule Based on Network

Read more about Reg D Rule 506b - Rule 506b of Reg D: Non-Accredited Investors & No Solicitation: [ Ссылка ]

Read more about Reg D Rule 506c - Rule 506c of Reg D – Solicitation & No Non-Accredited Investors: [ Ссылка ]

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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).

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