Which Exemption Should I Use: 506(b), 506(c), Reg CF or Reg A+?

Five questions decide it. Who will write the checks, people you know or strangers? Are they accredited? How much do you need? Do you have an audience or community that wants to invest? And how much time and fixed cost can you absorb before the first dollar arrives? People you know and mostly accredited: Rule 506(b). Accredited strangers you need to reach by advertising: Rule 506(c). A crowd of customers or fans writing small checks, up to $5 million a year: Regulation Crowdfunding. $5 million or more from the public, with four to five months and a substantial budget for SEC qualification: Regulation A+.

By Joel Arberman, founder of Prepared to Raise · 17 companies taken public, 30+ private placements prepared · Reviewed October 21, 2026

Question 1: Who will write the checks?

People who already know you point to Rule 506(b). People you have never met point to Rule 506(c), Regulation Crowdfunding or Regulation A+, depending on the answers below. This is the question most founders skip, and it decides the most.

Question 2: Are they accredited?

Accredited investors broadly have income over $200,000 ($300,000 jointly) or net worth over $1 million excluding their home. 506(c) allows only accredited investors. 506(b) allows up to 35 sophisticated non-accredited investors with full disclosure. Reg CF and Reg A+ allow anyone, with limits on how much non-accredited investors can put in.

Question 3: How much do you need?

  • 506(b) and 506(c): no limit.
  • Regulation Crowdfunding: up to $5 million in 12 months.
  • Regulation A+: up to $20 million (Tier 1) or $75 million (Tier 2) in 12 months.

Question 4: Do you have an audience that wants to invest?

Reg CF works when you bring the crowd: customers, fans, members, an email list or community that already cares about the business. Platforms rarely supply most of the investors. Without an audience, a crowdfunding campaign tends to stall.

Question 5: How much time and fixed cost can you absorb?

  • 506(b) or 506(c): four to six weeks of preparation; no SEC review; legal and preparation costs only.
  • Regulation Crowdfunding: about six weeks to launch; an accountant's review or audit depending on the amount; a funding portal that takes a percentage of what you raise.
  • Regulation A+: four to five months to SEC qualification for a typical company; audited financials for Tier 2; legal, audit and marketing costs that make it impractical below several million dollars; ongoing reporting afterward.

The answer, by situation

  • Raising up to about $1 million from family, friends, colleagues and customers you know, most of them accredited: Rule 506(b).
  • Raising $1 million to $10 million from wealthy individuals, and your network is not enough: Rule 506(c), with verification and marketing.
  • A consumer brand, restaurant, brewery or app with thousands of loyal customers who want to own a piece: Regulation Crowdfunding, often alongside a 506(c) offering for larger checks.
  • Raising $5 million or more from the public, with the budget and patience for SEC qualification, or building toward a public listing: Regulation A+.
  • Raising only from residents of one state: possibly an intrastate exemption, depending on that state's rules.

Combining exemptions

Companies often use more than one over time, and sometimes at once: a 506(c) offering for accredited investors running alongside a Reg CF campaign for everyone else is common. Running two offerings together raises integration questions, so do it with counsel. Onfolio Holdings raised three private placements, about $4 million in total and each at a higher price than the last, before its public listing.

What every path has in common

Each one has a filing (Form D, Form C or Form 1-A) and usually state notices. And on each path, investors decide on whether the offering is investable, not just whether it is legal: the amount, the valuation, the story, the risks, how they get paid back, and how you answer their questions.

Related questions

Can I switch exemptions mid-raise?

From 506(b) to 506(c), yes, by amending your Form D. From 506(c) back to 506(b), no, once you have advertised.

Which exemption is cheapest?

Rule 506(b) or 506(c) for most raises. Reg CF adds portal fees and accounting; Reg A+ adds audits, SEC review and ongoing reporting.

What about Rule 504?

It allows up to $10 million but does not pre-empt state law, so you must register or find an exemption in each state. It is rarely simpler.

Read next

Where to start

A Readiness Assessment ($1,500, credited within 60 days) settles the exemption for your situation and tells you which package fits. Considering Reg A+? Contact us for a custom quote.

Prepared to Raise is a service of Meraki Partners, LLC. This article is general information, not legal, tax or investment advice, and not an offer to sell or a solicitation to buy any security. Meraki Partners is not a broker-dealer, funding portal, investment adviser or law firm. Figures are as of the review date above.