What it is
Advertising a raise is usually called general solicitation. It means publicly promoting an opportunity to buy securities, such as through social media posts, public events, mass emails, podcasts, or website banners aimed at people the founder has no existing relationship with.
In the U.S., offering securities generally means either registering the offering or relying on an exemption. Two commonly discussed exemptions are Rule 506(b) and Rule 506(c) of Regulation D. They differ most on whether general solicitation is allowed.
Under Rule 506(b), general solicitation is not allowed. Under Rule 506(c), general solicitation is allowed, but all purchasers must be accredited investors, and the company must take reasonable steps to verify that status. Other exemptions and state rules may also apply, which is why professional guidance matters.
How it’s traditionally been approached
Many founders have traditionally raised money quietly, through warm introductions, existing networks, and conversations with people they already know. This approach is often associated with Rule 506(b), where the focus is on pre-existing, substantive relationships rather than public promotion.
Other founders choose a path that permits public promotion, often under Rule 506(c). This route allows broader visibility, but it generally comes with added steps, such as verifying that each purchaser is accredited rather than simply accepting a self-certification.
Either path has trade-offs in speed, reach, paperwork, and risk. Founders have commonly worked with securities counsel to decide which approach fits their situation, and to review any public statements before they go out.
How the right investor may help
The right investor or advisor may help you think through how you talk about your company before you speak publicly. A thoughtful soft circle investor may be familiar with how raises are typically run, and may help you see why timing and wording of public statements can matter.
A first conversation is generally an exchange of information, not a commitment. Soft circling refers to non-binding indications of interest, meaning someone expresses possible interest without any obligation to invest. Be careful, though: how and when you gather those indications can itself relate to solicitation rules, so check with counsel.
Good questions to ask include: Which exemption are we relying on, and why? Are we comfortable with general solicitation, or should we avoid it? How will accredited status be verified if needed? What can we say publicly about our company without it being treated as an offer? SoftCircle.ai is an independent directory, not a broker-dealer, funding portal, or investment adviser, and does not recommend or endorse any investment.
The bigger picture
Fundraising can feel urgent, and the pull to announce it everywhere can be strong. Pausing to understand the rules may protect your finances, your company's future options, and your own peace of mind, and it can reduce the worry of wondering whether a casual post caused a problem.
Taking care of yourself matters too. Raising capital is demanding, and steady routines, trusted mentors, and honest conversations can help you decide clearly. If it fits your wider wellbeing needs, Providers.plus may help you explore supportive resources. No single approach is right for everyone.
Keep in mind
- This page is educational only and is not investment, legal, or tax advice.
- Nothing here is an offer to sell, or a solicitation of an offer to buy, any security, and it is not a recommendation to invest.
- Rule 506(b) does not permit general solicitation; Rule 506(c) does, but requires that all purchasers be accredited and that reasonable steps be taken to verify it.
- Consult securities counsel before publicly discussing a raise, since facts, state laws, and other rules can change the answer.
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Frequently asked questions
Can founders advertise a raise?
Sometimes, but it depends on the exemption being used. Under Rule 506(c), general solicitation is allowed if all purchasers are accredited and the company takes reasonable steps to verify that. Under Rule 506(b), it is not allowed. Talk with securities counsel before promoting anything.
What is general solicitation?
General solicitation is publicly promoting an offering of securities to people with whom the issuer has no pre-existing relationship. Examples can include social media posts, public ads, and mass outreach. What counts can depend on the facts, so counsel can help interpret it.
What is the difference between Rule 506(b) and 506(c)?
The main difference is general solicitation. Rule 506(b) prohibits it, while Rule 506(c) permits it. Rule 506(c) also requires that all purchasers be accredited and that the company take reasonable steps to verify their status.
Can I post about my fundraising on social media?
It depends on how the raise is structured. A public post could be treated as general solicitation, which may be a problem under Rule 506(b). Check with securities counsel before posting about a raise or its terms.
What are soft circle investors?
Soft circle investors are people who may express non-binding indications of interest in a possible opportunity. These are not commitments, and no one is obligated to invest. SoftCircle.ai is a directory for educational purposes and does not broker or recommend investments.
Do I need a lawyer before advertising a raise?
It is wise to consult securities counsel first. Rules on exemptions, verification, and state requirements can be complex, and mistakes can be costly. A lawyer can help you decide what you may say publicly and how to document your process.
Educational resource. SoftCircle shares general information and connects people with independent investors. It is not professional advice. Talk with a qualified professional about your own situation.