Rule 506(c) Verification
506(c) verification that doesn't slow down your raise.
Rule 506(c) lets you publicly solicit investors — but requires independent verification of every LP's accredited status. Fassport handles the full verification workflow in under 24 hours, with audit-ready records that hold up to SEC scrutiny.
What 506(c) requires
The compliance requirements, plainly stated.
All investors must be accredited
No non-accredited investors permitted — even up to 35 as allowed under 506(b).
Independent verification required
Self-certification is not sufficient. The issuer must take reasonable steps to verify using accepted documentation or third-party confirmation.
Form D filing within 15 days
A Form D must be filed with the SEC within 15 calendar days of the first sale.
Audit trail maintained
Verification records must be retained and producible in the event of SEC examination.
How Fassport handles 506(c)
Verification in under 24 hours, start to finish.
Send a secure verification link to the investor
Investor uploads income or asset documentation directly
Fassport reviews documentation against SEC safe harbor methods
Audit-ready verification record generated and stored
Average verification time
Industry average is 3–6 weeks. Fassport completes the same process in under 24 hours — without sacrificing audit quality or defensibility.
Supports all SEC safe harbor methods: income-based, net worth-based, third-party confirmation, and prior verified investor.
506(c) questions, answered.
What is Rule 506(c)?
Rule 506(c) is an SEC exemption under Regulation D that allows issuers to publicly advertise and generally solicit investors for a private offering — including through social media, public events, and paid advertising — provided that all investors in the offering are accredited investors and the issuer takes reasonable steps to independently verify their accredited status.
How does 506(c) verification differ from 506(b)?
Under Rule 506(b), accredited investors can self-certify their status — the issuer does not need to independently verify. Rule 506(c) removes this option: the issuer must independently verify each investor's accredited status using documentation such as tax returns, financial statements, or a written confirmation from a licensed CPA or attorney. This is required because 506(c) permits general solicitation.
What are the consequences of improper 506(c) verification?
Failing to take reasonable steps to verify investor accreditation under Rule 506(c) can result in loss of the exemption, requiring rescission of the offering, civil liability to investors, and SEC enforcement action. An offering that fails to qualify for 506(c) exemption may be deemed an illegal unregistered securities offering.
Can I switch between 506(b) and 506(c) mid-offering?
No. Once general solicitation occurs under a 506(c) offering, you cannot retroactively convert to 506(b). The exemption type must be determined before the first general solicitation. If you have already publicly marketed the offering, you are locked into 506(c) requirements including independent verification of all investors.
Ready to run a compliant 506(c) offering?
Fassport handles verification, subscription docs, data rooms, capital calls, and reporting — all in one platform at a flat monthly fee.
Book a demo →No success fees. Setup in under an hour.