Overview
What Reg D Is
Regulation D is the most common federal exemption fund managers use to raise private capital without registering the offering as a public securities sale. Under Rule 506, you can raise an unlimited amount from accredited investors and, in some structures, a limited number of non-accredited but sophisticated purchasers.
Rule 506(b)
No General Solicitation
You cannot broadly advertise the offering. You can sell to up to 35 non-accredited (but sophisticated) investors and an unlimited number of accredited investors. This is the default for most relationship-driven emerging funds.
Rule 506(c)
General Solicitation Permitted
You can publicly market the fund — but you must take reasonable steps to verify that every purchaser is accredited. The investor pool is effectively limited to accredited investors only.
Deliverables
What We Handle
01
Private Placement Memorandum (PPM): full disclosure covering strategy, risks, fees, conflicts, and tax treatment.
02
Fund governing documents: LPA or Operating Agreement — waterfall, preferred return, catch-up, carry, GP commit.
03
Subscription documents: subscription agreement, investor questionnaire, accredited-investor verification (506(c)).
04
Entity formation & structuring: fund vehicle, GP/manager entity, 3(c)(1) vs. 3(c)(7) election.
05
Form D and state notice filings: federal filing plus blue-sky filings in each investor's state.
06
Bad-actor disqualification checks: Rule 506(d) screening for all covered persons.
07
Adviser registration analysis: ERA vs. full registration vs. exemption.
07
Ongoing compliance: annual review, side letter administration, compliance calendar.
Fund Structure
3(c)(1) vs. 3(c)(7)
Most private funds rely on an exemption from Investment Company Act registration:
3(c)(1)
Up to 100 beneficial owners. Can include non-accredited (but qualified) investors. Common for smaller, relationship-driven funds.
3(c)(7)
Unlimited beneficial owners, but limited to "qualified purchasers" only. Common for larger funds and institutional capital.
Timeline
Deliverables & Timeline
Typical scope: complete PPM, LPA/Operating Agreement, subscription documents, side letter template, entity formation documents, Form D and state notice filings, and a compliance memorandum covering adviser registration and bad-actor compliance.
Typical timeline: 6–10 weeks from engagement to first close, assuming prompt manager input and finalized strategy.
What we need from you: fund strategy summary, target investor pool, fee/carry/economics preferences, and any existing materials or side letters.
FAQ
Reg D — Specific FAQ
