In July 2013, the U.S. Securities and Exchange Commission ("SEC") made the biggest changes to private placement capital raising rules since the SEC issued Regulation D more than three decades ago.

More than 90% of private securities offerings are affected by these changes.

The SEC's recent changes are a mixed blessing for businesses selling securities.  These changes include:

  • Prohibiting using Rule 506 if someone affiliated with your business or with your capital raising efforts has violated securities or other financial industry laws.
  • Adding new Rule 506 (c), which allows you to advertise when you raise capital in a private placement.
  • Rule 506 (c) also requires you to take reasonable steps to independently verify that all people who buy securities are "accredited investors," if you advertise in your offering.

Our articles in this series about SEC Rule 506 private placements help you decide how you can use these new rules to raise the capital your business needs by balancing three competing factors:

  • Advertising effectiveness
  • Budget
  • Securities law compliance 

You have to get all three right to successfully raise capital.