Regulation D

What is Regulation D? A Complete Guide to Private Capital Raising in the U.S.

For businesses, startups, hedge funds, and private equity sponsors looking to raise capital without going public, Regulation D of the Securities Act of 1933 offers a powerful solution. By providing exemptions from SEC registration, Regulation D allows issuers to legally offer and sell securities to investors—while saving time, reducing costs, and maintaining confidentiality.

If you’re planning a private placement offering, understanding Regulation D is essential to ensuring compliance and investor confidence.

What is Regulation D?

Regulation D (Reg D) is a set of rules established by the U.S. Securities and Exchange Commission (SEC) that allows issuers to raise capital through the sale of securities without registering the offering with the SEC. These exemptions are designed to support capital formation, especially for smaller businesses and investment vehicles, while still protecting investors.

Reg D primarily governs offerings under Rules 504, 506(b), and 506(c), each with its own requirements, limitations, and investor eligibility criteria.

Key Benefits of Regulation D Offerings

  • Avoid SEC Registration: Save time and legal costs by claiming an exemption

  • Access Accredited Investors: Raise capital from high-net-worth individuals and institutions

  • Maintain Privacy: Offerings are not publicly disclosed beyond Form D

  • Raise Unlimited Capital (under Rule 506)

  • Flexible Structuring: Equity, debt, convertible notes, SAFEs, and more

  • Expedited Timeline: Launch your offering faster than through a public route

Overview of Regulation D Exemptions
Rule 504 – Small Offerings Exemption

  • Capital Limit: Up to $10 million in a 12-month period

  • Investors: May be offered to non-accredited investors (restrictions apply)

  • Solicitation: Generally prohibited, unless state law permits

  • State Blue Sky Filings Required: Yes

>> Best suited for early-stage companies raising smaller rounds of capital.

Rule 506(b)– Traditional Private Placement

  • Capital Limit: No limit on funds raised

  • Investors: Unlimited accredited investors + up to 35 non-accredited (must be sophisticated)

  • Solicitation: General advertising and solicitation are prohibited

  • Disclosure Required: Detailed disclosures must be provided to non-accredited investors

  • Form D Filing: Required within 15 days of first sale

  • State Blue Sky Notices: Required in each investor’s state

>> Commonly used for venture capital, real estate syndications, and fund formation.

Rule 506(c)– General Solicitation Allowed

  • Capital Limit: Unlimited

  • Investors: Accredited investors only

  • Solicitation: Permitted, including public advertising

  • Verification: Issuer must take reasonable steps to verify accreditation status

  • Form D Filing: Mandatory

  • Blue Sky Compliance: Still applies at the state level

>> Ideal for issuers who want to promote their offering online or through public channels.

Who Qualifies as an Accredited Investor?

Under Rule 501 of Regulation D, an accredited investor includes:

  • Individuals with net worth over $1 million (excluding primary residence)

  • Individuals with income over $200,000 ($300,000 with spouse) for the past two years

  • Certain institutional investors, trusts, entities, and insiders

  • Entities where all equity owners are accredited investors

Form D Filing Requirement

Regardless of which Reg D rule you rely on, Form D must be filed with the SEC within 15 calendar days of the first sale of securities. This is a notice filing, not a registration, and includes basic information about the issuer, offering type, and exemption claimed.

**Don’t forget: Blue Sky filings must also be made in each state where investors reside—along with applicable filing fees.

Common Use Cases for Regulation D Offerings

  • Startup seed or Series A capital raises

  • Real estate syndications and private REITs

  • Hedge fund or venture fund launches

  • Private lending and debt instruments

  • Convertible note or SAFE offerings

  • Crowdfunding for accredited investors under Rule 506(c)