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Regulation D 506(c) is fastest (3-6 weeks) for accredited investors only — unlimited raise, allows general solicitation ($30,000–$75,000 legal cost). Regulation A+ Tier 2 allows all US investors with $75M max raise — requires SEC review (3-6 months, $100,000–$350,000 legal cost). Regulation CF allows all US investors with $5M max raise — filed with FINRA portal (4-8 weeks, $15,000–$40,000 legal cost). Choose based on investor type, raise amount, and timeline.
The Three Exemptions Compared
| Factor | Regulation D 506(b) | Regulation D 506(c) | Regulation A+ Tier 2 | Regulation CF |
|---|---|---|---|---|
Who can invest | Accredited + 35 non-accredited | Accredited only | All US investors | All US investors |
Max raise | Unlimited | Unlimited | $75M per 12 months | $5M per 12 months |
General solicitation | No (no public advertising) | Yes | Yes | Yes |
SEC approval required | No (file Form D within 15 days) | No | Yes (qualification required) | No (but Reg CF portal required) |
Investor verification | Self-certification | Third-party verification required | N/A | N/A |
Ongoing reporting | None | None | Semi-annual + annual SEC reports | Annual report |
Secondary market | Restricted | Restricted (ATS only) | Freely tradeable after 12 months | Restricted 12 months |
Timeline to first close | 3–6 weeks | 3–6 weeks | 3–6 months (SEC review) | 4–8 weeks (portal setup) |
Legal cost | $25,000–$60,000 | $30,000–$75,000 | $100,000–$350,000 | $15,000–$40,000 |
How to Choose
- Raising from institutions (VCs, family offices, HNW individuals): Regulation D 506(c) — fastest, cheapest, accredited investors only, but allows general solicitation so you can market publicly.
- Raising from the retail public at scale: Regulation A+ — requires SEC review (takes 3–6 months) but allows unlimited public marketing and all US investors. Best for: consumer-facing tokenization where broad retail participation is the value.
- Raising under $5M from the community: Regulation CF — available to all US investors, filed with FINRA-registered funding portal, no SEC review required. Best for: community-backed projects where the cap fits.
- Quiet institutional round: Regulation D 506(b) — no general solicitation allowed, but no third-party accreditation verification required (self-certification sufficient). Lower compliance cost.