What Is General Solicitation? Definition and Examples

The general solicitation definition sits in Rule 502(c) of Regulation D. Regulation D is the set of SEC rules for selling securities without registering them. Rule 502(c) says an issuer, or anyone acting for it, may not offer or sell the securities by any form of general solicitation or general advertising. The issuer is the company, fund or vehicle that sells the securities.

The rule gives two examples. The first is an advertisement, article, notice or other communication in a newspaper, a magazine or similar media, or on television or radio. The second is a seminar or meeting whose attendees were invited through public advertising.

What Does General Solicitation Mean in Practice?

In practice it means reaching people the issuer has no existing link to, through channels anyone can see. SEC staff say the test depends on the facts. The more people without investing experience or any prior personal or business tie to the issuer are contacted through impersonal, non-selective means, the more likely it counts.

A private placement is a sale of securities to a limited group of buyers without a public offering. Most of them use Rule 506 of Regulation D, which has two paths. Rule 506(b) bans general solicitation and lets up to 35 buyers who are not accredited join, if they have enough financial knowledge to judge the risks. Rule 506(c) allows it and accepts only accredited investors, people who pass the SEC’s income, wealth or license tests.

Rule 506 once barred public advertising outright. On July 10, 2013, the SEC adopted the rule that lifted the ban for certain offerings. The new paragraph, 506(c), lets an issuer advertise as long as every buyer is accredited and the issuer takes reasonable steps to verify it. The full mechanics are on the page about Reg D 506(c).

Some activities are listed in the rules, and some come from SEC staff answers. The table sorts the common ones. Staff answers state a staff view, and each case turns on its facts.

Two of these need a plain explanation. A pre-existing, substantive relationship is one the issuer built before the offering, such as a prior business tie. Staff call it one way, but not the only way, to show there was no public solicitation. A demo day is an event where several companies present to investors. Under Rule 148 it must be sponsored by a college, a government body, a nonprofit, an angel group, an incubator or an accelerator. The event advertising cannot name a specific offering, and the sponsor cannot give investment advice or earn fees for introductions.

Staff also separate facts from offers. Factual business information about the issuer’s business, finances, products and services is treated differently from an offer. It does not include predictions, projections, forecasts or opinions about the value of a security.

Take a hypothetical issuer that posts its private round on a public website. That counts, so Rule 506(b) is off the table. The issuer moves to Rule 506(c). The numbers below are illustrative.

The issuer cannot rescue the four by relabeling the offering as 506(b). Staff guidance says an issuer that solicited in a 506(c) offering can later sell under 506(b) only to people with whom it had a substantive relationship. Time passing and a short accreditation questionnaire do not create one. The notice rules are on the page about Form D.

If a private deal is marketed in public, assume the issuer chose Rule 506(c). The issuer will ask you for evidence of your status. It can use tax forms, bank or brokerage statements, or a letter from a registered broker-dealer, an SEC-registered adviser, an attorney or a CPA. A tick in a box is usually not enough. Axevil’s own accreditation takes about five minutes in the app, with one document and an e-signature, and the steps are in accredited investor verification.

If a deal reached you through someone who already knows you, it may be a Rule 506(b) offering. In that case, a sophisticated investor who is not accredited has a route in. Either way, the shares are restricted securities, which means you cannot resell them freely. Advertising a private deal does not make it liquid.

• Posting first, choosing the rule laterA public post can cost an issuer the Rule 506(b) path. The choice of rule has to come before the marketing.
• Skipping verification under 506(c)The rule requires reasonable steps to verify each buyer. A self-certification alone is usually not enough.
• Calling a mailing list a relationshipA relationship has to exist before the offering and has to be substantive. SEC staff judge it on the facts.
• Mixing facts with offersA page of factual business information is treated differently from a pitch. Predictions and valuation opinions are outside the staff’s description of factual business information.
• Assuming demo days are always safeRule 148 comes with conditions on the sponsor, the event advertising and what the issuer may say.
• Treating advertising as liquidityA publicly marketed offering still produces restricted securities.

General solicitation

Offering securities to the public through advertising, broadcasts or seminars open to anyone. Rule 506(b) bans it and Rule 506(c) allows it.

Private placement

A sale of securities to a limited group of buyers, without a public offering or registration.

Issuer

The company, fund or vehicle that sells the securities.

Accredited investor

A person or entity that meets one of the SEC’s income, wealth or license tests.

Rule 506(b)

The Regulation D route with no general solicitation and up to 35 buyers who are not accredited in any 90 days.

Rule 506(c)

The Regulation D route that allows general solicitation and accepts only verified accredited investors.

Pre-existing, substantive relationship

A real connection between the issuer and an offeree that was built before the offering began.

Demo day

An event where several companies present to investors. Rule 148 sets the conditions under which it is not general solicitation.

Restricted securities

Securities bought in a private offering. They cannot be resold publicly without registration or another exemption.

Figures were last checked on October 13, 2026. The rules are United States federal rules. Staff guidance states the views of SEC staff. The Commission has not adopted it, and it can change.