506x -

: Issuers must take "reasonable steps" to verify an investor’s status, such as reviewing tax returns or bank statements, rather than just relying on the investor's word. Comparison at a Glance Rule 506(b) Rule 506(c) Public Advertising Prohibited Accredited Investors Non-Accredited Investors Up to 35 (must be sophisticated) None Allowed Verification Method "Reasonable Belief" "Reasonable Steps to Verify"

This is the traditional route used by many private companies to raise unlimited capital. : Issuers must take "reasonable steps" to verify

: Issuers are strictly prohibited from using public advertising or "general solicitation" to market the deal. : Issuers must take "reasonable steps" to verify

The most helpful articles on this topic often compare its two primary "safe harbors": and Rule 506(c) . Rule 506(b): The Private Placement Standard : Issuers must take "reasonable steps" to verify