: The issuer must have a "reasonable belief" that the investor is accredited, often based on the investor's own questionnaire. Rule 506(c): The "General Solicitation" Exemption
: Companies can sell to an unlimited number of Accredited Investors and up to 35 "sophisticated" non-accredited investors. : The issuer must have a "reasonable belief"
: 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" : The issuer must have a "reasonable belief"