We were jumping for joy at the restrictions lifted from general solicitation..!
Rule 506(c) of Regulation D. Section 201(a) of the JOBS Act requires the SEC to eliminate the prohibition on using general solicitation under Rule 506 where all purchasers of the securities are accredited investors and the issuer takes reasonable steps to verify that the purchasers are accredited investors.
Rule 506(b) of Regulation D is considered a “safe harbor” under Section 4(a)(2). It provides objective standards that a company can rely on to meet the requirements of the Section 4(a)(2) exemption. Companies conducting an offering under Rule 506(b) can raise an unlimited amount of money and can sell securities to an unlimited number of accredited investors.
In plain terms, 506(c) means you can ask people whom you don’t know, that make a certain amount of money, (accredited investors), to invest in your company by using the internet, or any type of advertising you want. Before then, you couldn’t do it or you would be breaking the law.
Rule 506(b) means that you can ask a small amount of people, (up to 35), that can make any amount of money, and that you’ve known for at least 30 days to invest in your company.
(You will have to be able to prove it. That’s where we can help. More on that later)
Regulation crowdfunding is handled by the funding portals and allows you to raise from ANYONE that comes to that website and meets the minimum purchase requirement for your shares.
(Cool right? Yeah, we love it too)
Of course, all of the above is just for information purposes and can be further outlined here on the Securities and Exchange Commission website. Speak to a lawyer for more information as well.