Startup Law
Can I publicly advertise that my startup is fundraising?
Whether you can publicly advertise that you are fundraising depends on your exemption. Under Rule 506(b) of Regulation D you generally cannot solicit publicly; you may include up to 35 non-accredited investors with disclosure, and the rest must be accredited. Under Rule 506(c) you can advertise openly, including on social media, but every investor must be accredited and you must take reasonable steps to verify it. Both require a Form D filing within 15 days of the first sale. Before making decisions, consult securities counsel.
What is the difference between Rule 506(b) and 506(c)?
Rule 506(b) bans general solicitation and lets you include a limited number of non-accredited investors with disclosure; Rule 506(c) lets you advertise the raise openly but requires that every investor be accredited and that you verify it.
The trade is reach versus verification burden.
Can I post my raise on social media?
Only under Rule 506(c) — and then you must take reasonable steps to verify that each investor is accredited, such as reviewing financial documents or using a third-party verification service.
A single public solicitation can disqualify a Rule 506(b) round, so decide which exemption you are using before you post anything.
Who is an accredited investor?
Generally an individual with income or net worth above set thresholds (excluding a primary residence), or who fits one of several professional or entity categories under Rule 501.
Verify the current thresholds and categories before relying on them.
What is a Form D and what are the blue-sky rules?
Form D is a brief SEC notice filed within 15 days of the first sale; it is not an approval. Federal law (NSMIA) preempts state registration for Rule 506 offerings, but states can still require notice filings and fees.
Plan for filings in each investor's state.
What is the general-solicitation trap?
If you are relying on Rule 506(b) and you publicly advertise the raise — a tweet, a post, a pitch at a public demo day — you can lose the exemption for the whole round.
Know which exemption you are using before you talk about the raise in public.
Talk to a startup attorney
Planning to announce your raise publicly? One wrong post can cost you the exemption. Get the structure right first in a 5-minute triage: (773) 777-9888.
Frequently asked questions
Can I post my raise on LinkedIn or X?
Only if you are relying on Rule 506(c), and then you must verify that every investor is accredited. If you are relying on Rule 506(b), public posts can blow the exemption. Decide which exemption applies before you announce anything.
What are the accredited-investor thresholds?
They are based on income or net worth (excluding a primary residence) or on fitting specific professional or entity categories under Rule 501. The exact numbers and categories can change, so confirm the current rule before you rely on a figure.
What is a Form D?
A short notice you file with the SEC within 15 days of your first sale of securities, identifying the issuer, the exemption, and the offering. It is a notice, not an approval, and failing to file can cause problems with future Rule 506 offerings.
What if I accidentally solicited under Rule 506(b)?
Public solicitation can disqualify a Rule 506(b) offering. If it happens, talk to counsel quickly — there may be options, including whether the offering can fit Rule 506(c) if all investors are accredited and verified. Do not keep raising until you know.
Can I raise from non-accredited investors at all?
Yes, through other paths — for example, Regulation Crowdfunding or Regulation A — each with its own limits, disclosure, and filing requirements. Rule 506(b) also allows up to 35 non-accredited investors (accredited investors do not count toward that limit) with proper disclosure. The right path depends on how much you are raising and from whom.
Do I have to file in every investor's state?
Federal law preempts state registration for Rule 506 offerings, but most states still require a notice filing and a fee, often within 15 days of the first sale in that state. Track where your investors reside so you can make the required state notice filings.
More in Startup Law
- Startup Law — overview and all topics
- LLC or Delaware C-Corp for a Startup?
- The 83(b) Election
- Co-Founder Equity Splits and Vesting Schedules
- SAFE vs Convertible Note
- Corporate Transparency Act / BOI Reporting (2026 Status)
- Who Owns Your Startup's IP (and How to Make Sure It's the Company)
- What Is a 409A Valuation and When Does My Startup Need One?
- Can I Pay My First Hire as a 1099 Contractor?
- Does Registering My LLC Protect My Brand Name? (Startup Trademarks)