The New 506(c) Marketing Revolution: How Fund Managers Can Now Advertise Publicly to Accredited Investors
For over a decade, Rule 506(c) existed on paper as a powerful capital-raising tool — and was almost entirely ignored in practice. That just changed.
On March 12, 2025, the SEC's Division of Corporation Finance issued a landmark no-action letter that removes the single biggest obstacle keeping fund managers away from 506(c): the burden of verifying accredited investor status. Implemented in 2013 under the JOBS Act, Rule 506(c) has been only sparingly used over the last decade despite its potential to access a much wider audience for capital raising. Diana Burress Now, for real estate fund sponsors, OZ fund managers, and private placement issuers, the door to public advertising has swung wide open.
What Changed — and Why It Matters
Before this guidance, complying with 506(c) meant collecting invasive documentation from every investor: tax returns, bank statements, brokerage records, or third-party verification letters from attorneys or CPAs. Private funds no longer need to rely on those burdensome verification procedures — meaning no more IRS forms, bank or brokerage statements, credit reports, or professional verification letters. McKinsey & Company
Under the new framework, issuers may now rely on minimum investment amounts as a reasonable step to verify accredited investor status — specifically, at least $200,000 for natural persons and at least $1 million for legal entities. WillyHomes The investor must also provide a written representation confirming their accredited status and that their investment is not being financed by a third party. That's it. No financials. No tax returns. No uncomfortable conversations about net worth.
The SEC also updated its compliance and disclosure interpretations with two new questions about verification of accredited investor status in 506(c) offerings, cementing the guidance into practice. Markets Group
506(b) vs. 506(c): Which Is Right for Your Fund?
This is the question every fund manager should be asking right now. Rule 506(b) does not allow general solicitation — you can only share your offering with people you already have a pre-existing, substantive relationship with. Rule 506(c), by contrast, allows general solicitation, meaning you can promote your offering on social media, podcasts, email campaigns, and anywhere else — however, you can only accept accredited investors and must verify their status. Morgan Lewis
The fundraising gap between the two has been striking: issuers raise around $169 billion annually under Rule 506(c) compared to $2.7 trillion under 506(b). K&L Gates That gap exists almost entirely because of verification friction — friction that has now been dramatically reduced. The economic argument for 506(c) is strongest once your raise exceeds what your personal network can reliably support.
One important nuance: you can switch from 506(b) to 506(c) to start marketing your offering, but you cannot switch from 506(c) to 506(b) once public solicitation has begun.Flastergreenberg Choose your path deliberately, and document that decision with securities counsel.
What 506(c) Now Unlocks for Fund Managers
You can now advertise broadly and legally — through digital platforms, newsletters, podcasts, or pitch events — without worrying about violating general solicitation restrictions. Gibson Dunn Practically speaking, this means:
LinkedIn and social media — You can post about your fund, your deal pipeline, your track record, and your investment thesis publicly without triggering a securities violation. Targeted LinkedIn advertising to high-net-worth professionals, executives, and business owners is now fully compliant.
Your website — A dedicated investor page with deal details, projected returns, and a direct call to invest is now permissible under 506(c). Your website becomes a 24/7 capital-raising asset rather than a compliance liability.
Webinars and virtual events — Open-registration investor webinars where you present specific deal terms and invite commitments are now fair game. These are among the highest-converting formats for reaching accredited investors at scale.
Email campaigns — Broad email outreach to prospect lists — not just existing relationships — is now permitted, making your CRM a genuine growth engine.
Don't Forget Blue Sky Compliance
One area where fund managers must still tread carefully: state-level securities laws. Issuers relying on Rule 506(c) should remain mindful of states' blue sky compliance and implications for marketing in non-U.S. jurisdictions. WallStreetZen While federal Regulation D preempts most state registration requirements, some states require notice filings or have additional rules around advertising content. Work with securities counsel to map your target investor states before launching any public campaign.
The Bottom Line
The March 2025 no-action letter is the most significant practical development for private fund marketing in years. This guidance should provide issuers with an easier path to rely on Rule 506(c) and solicit and advertise their private investment funds to investors across the United States. PwC For real estate fund sponsors and OZ fund managers who have been constrained by their existing networks, this is the moment to build a real marketing infrastructure — a content strategy, a digital presence, and a compliant investor funnel designed to attract and qualify accredited investors at scale.
The rules have changed. The question now is whether your marketing strategy has.
This article is for informational purposes only and does not constitute legal or securities advice. Consult qualified securities counsel before changing your offering structure or launching any general solicitation campaign.
SOURCES:
1. The Actual SEC No-Action Letter (Latham & Watkins)
2. IQ-EQ — SEC Provides New Guidance Simplifying Accredited Investor Verification
3. Kirkland & Ellis — SEC No-Action Letter Opens the Door Wider on Rule 506(c)
4. Winston & Strawn — SEC Issues No-Action Letter Clarifying Verification Under Rule 506(c)
5. King & Spalding — SEC Staff No-Action Letter Eases Rule 506(c) Accredited Investor Verification
6. Ropes & Gray — SEC Issues No-Action Letter Clarifying Rule 506(c) Accredited Investor Verification
7. Crowell & Moring — SEC Issues No-Action Letter Clarifying Accredited Investor Verification
8. Morgan Lewis — New SEC Guidance Eases Burden in Rule 506(c) Accredited Investor Verification
9. K&L Gates — Rule 506(c) Unchained? The SEC Loosens Requirements for Advertising
506(b) vs. 506(c) — Statistics & Comparison
10. Petra Funds Group — Private Fundraising Expanded as SEC Updates Rule 506(c)
11. Gower Crowd — 506(b) vs. 506(c): Which Path for Your Next Raise?
https://gowercrowd.com/real-estate-syndication/506b-vs-506c-guide
12. Rise48 Equity — 506(b) vs. 506(c): The Difference in Real Estate Fundraising