Registration-Exempt Rule 506(c) Securities Offerings

Entrepreneurs, businesses and CRE developers now have the opportunity to obtain capital financing on an unlimited basis. If you are a serious, committed business professional seeking at least $10 million in capital financing, well your ship may have arrived and you need to pay attention.
The United States Securities & Exchange Commission (“SEC”) made the final rule change to Rule 506(c) of Regulation D of the Securities Act of 1933 (as amended) effective back in September 2013. This change was done relatively quietly but has created a potential tsunami in the capital markets and business financing industry. The rule change allows all businesses to now raise unlimited amounts of capital and do so using broad advertising (called a “general solicitation”) that had been previously prohibited for 80 years. To make the change even sweeter, businesses using this avenue are not required to have a broker-dealer of record, the valuation fairness opinion, nor are they required to undertake the extraordinarily expensive SEC IPO registration and reporting processes.

The practical impacts of this rule change are:

  • The cost and time required to complete your funding can be a small fraction compared to an IPO.
  • The odds of a successful outcome are consistent with that of IPOs as you will utilize the same approach – mass advertising – to quickly sell and close your financing and access a profit-taking opportunity at the same time (read the memo on this important topic).
  • You no longer have to face the prospect of losing control of your venture or having to accept a minority share of the long-term equity and cash flow YOU create.

Watch this brief program video and you can decide for yourself what works best for your venture – what the banks, broker-dealers and funds will jam down your throat or what YOU decide to offer the investing-public (i.e.: accredited investors only who participate).


Contact us to schedule a no-obligation presentation and good-faith estimate of costs and schedule for your particular venture at 832.663.9634.

Leave a Reply