General Solicitation
General solicitation is broad public advertising, promotion or outreach used to identify or attract potential investors for a securities offering.
General solicitation determines which private-offering paths are available
The phrase matters because private-offering exemptions treat public promotion differently.
Rule 506(b) generally prohibits general solicitation, while Rule 506(c) permits it if all purchasers are accredited investors and the issuer takes reasonable steps to verify accredited status.[1][2]
That distinction changes how an issuer can market a financing.
What can count as general solicitation?
The analysis is broader than paid advertising.
Potential examples can include:
- unrestricted public websites
- mass emails to people without a qualifying prior relationship
- public social-media campaigns
- newspaper or magazine advertisements
- open seminars or investment events
- media campaigns intended to attract investors
- broadly distributed offering announcements
The issue is whether the communication conditions the market or reaches potential investors through a public channel.
A pre-existing substantive relationship can matter
For offerings that do not permit general solicitation, a common compliance approach is to limit outreach to investors with whom the issuer or an intermediary has a pre-existing, substantive relationship.[2]
“Pre-existing” addresses timing.
“Substantive” addresses whether enough is known about the prospective investor to evaluate suitability or financial sophistication rather than merely having a name on a list.
A purchased database is not transformed into a private relationship simply because the issuer sends individual emails.
Rule 506(c) changes the marketing rule, not the investor rule
Rule 506(c) allows broad solicitation, but it adds a strict purchaser condition.[1]
All purchasers must be accredited investors, and the issuer must take reasonable steps to verify that status.
That is different from Rule 506(b), where an issuer generally cannot advertise publicly but may sell to accredited investors and, subject to additional requirements, up to 35 qualifying non-accredited investors.
The choice of exemption therefore affects both marketing strategy and investor onboarding.
Public communication can affect another offering
General solicitation also matters when an issuer conducts multiple offerings near one another.
Current integration rules ask whether publicly solicited investors were improperly brought into a later offering that does not permit general solicitation.
The sequencing and audience of communications can therefore matter even when each financing appears separate.
Common mistakes
“A social-media post is harmless if it does not include a price.”
Not necessarily. A communication can condition the market without containing every deal term.
“Rule 506(c) allows anyone to invest.”
No. Broad solicitation is permitted, but every purchaser must be accredited.
“An accredited investor can always be solicited publicly under Rule 506(b).”
No. Accredited status does not eliminate Rule 506(b)’s general-solicitation restriction.
“Only paid ads count.”
No. Public events, websites, media outreach and mass communications can also be relevant.
Example
An investor evaluating General Solicitation should identify the exact transaction structure, eligibility conditions, disclosure duties and resale constraints that apply.
Professional note
The key compliance question is not how polished the marketing looks. It is who can see it and why they are seeing it. A communication intended to attract an unrestricted investor audience can change the legal pathway for the offering even if it looks like ordinary corporate promotion.
Related terms
- Rule 506(b)
Rule 506(b) is a Regulation D safe harbor that permits an issuer to raise an unlimited amount without Securities Act registration while prohibiting general solicitation and allowing limited participation by sophisticated non-accredited investors.
- Rule 506(c)
Rule 506(c) is a Regulation D exemption that permits general solicitation and advertising if all purchasers are accredited investors and the issuer takes reasonable steps to verify accredited status.
- Section 4(a)(2)
Section 4(a)(2) of the Securities Act exempts transactions by an issuer that do not involve a public offering from Securities Act registration.
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