Accredited Crowdfunding With Rule 506(c)

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In this presentation, Brenda Hamilton , a securities lawyer discusses accredited crowdfunding pursuant to Rule 506(c) of Regulation D of the Securities Act of 1933, as amended (the “Company”) which allows a company to raise unlimited funds from accredited investors without a filing with the Securities & Exchange Commission (“SEC”) if certain requirements are met.
Under Rule 506(c), the company must take “reasonable steps” to verify the investors' accredited status. In these times of social distancing, Rule 506(c) provides an important benefit because companies can offer and sell their securities online using social media outlets like Twitter, Facebook and Instagram, enabling it to appeal to the “crowd” that characterizes a crowdfunding effort.

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