Regulation D
An SEC rule providing exemptions from securities registration, enabling private capital raises from accredited investors.
What is Reg D?
Regulation D (Reg D) is an SEC rule that provides exemptions from the registration requirements of the Securities Act of 1933, allowing companies to raise capital through private placements without a public offering. It is the most commonly used fundraising mechanism for startups and private equity funds. The two main rules — 506(b) and 506(c) — govern the number of non-accredited investors allowed and whether general solicitation is permitted.
Example
A startup raising $5 million in a seed round files a Form D with the SEC under Reg D Rule 506(b) within 15 days of the first sale. This allows it to raise capital from accredited investors without registering the securities, saving millions in SEC registration costs and public disclosure obligations.
Source: SEC — Regulation D Exemptions