Rule 506(c) for Content Creators: Raise From Followers

Rule 506(c) lets a content creator promote a real estate offering publicly, on YouTube, Instagram, a podcast or a newsletter, if every buyer is an accredited investor and the sponsor takes reasonable steps to verify it. A self-reported checkbox is not enough. If you are the sponsor, we built DoorRaise to run those verification checks for you.

Key takeaways

Rule 506(c) is the exemption that permits general solicitation, so a public post about a live deal does not break it the way it would break Rule 506(b).
Every purchaser must be accredited, and the issuer must take reasonable steps to verify that status. Typing "I'm accredited" into a form does not meet the rule.
In March 2025 SEC staff said a high minimum investment plus written representations can count as reasonable steps. It is staff guidance, not a rule, and most apartment deals have lower minimums.
A Form D is due within 15 days after the first sale, and the bad actor rules still apply to you, your officers and anyone you pay to find investors.
Our pick for sponsors: DoorRaise includes accreditation checks on every investor in its $500 setup fee, so verification is built into the sign-up flow.

What does Rule 506(c) let a creator do?

It lets you "broadly solicit and generally advertise" a private offering, as long as every purchaser is accredited and you verify it. That is how the SEC describes the exemption, and the conditions sit in 17 CFR 230.506(c).

For a creator, this is the main legal reason to choose 506(c). Your audience is your marketing channel, and under 506(b) a public pitch to that audience is the one thing you cannot do. Our 506(b) vs 506(c) comparison covers the full trade.

Securities sold under 506(c) are restricted securities, and the offering is still subject to the antifraud rules and the bad actor provisions. Public does not mean unregulated. It is one piece of the larger real estate syndication process.

Who counts as an accredited investor?

For individuals, the main tests are net worth, income and certain licenses. The definition is in 17 CFR 230.501(a), and you should confirm the current text with counsel before you rely on it.

Net worth: over $1,000,000, alone or with a spouse or spousal equivalent, not counting the primary residence.
Income: over $200,000 individually, or $300,000 jointly with a spouse or spousal equivalent, in each of the two most recent years, with a reasonable expectation of the same this year.
Licenses: the SEC has designated the Series 7, Series 65 and Series 82 as qualifying credentials for people who hold them in good standing, per the SEC's accredited investor guide.

Entities have their own tests, such as total assets over $5,000,000 for an entity not formed to acquire the securities. Our accredited investor definition guide walks through them.

How do you verify accredited status?

Rule 506(c) requires "reasonable steps," and the rule lists methods that are not exclusive. The right method depends on the facts, including how the investor was solicited and the size of the investment.

Method	What the investor provides
Income	IRS forms for the two most recent years (W-2, 1099, Schedule K-1 or Form 1040), plus a written representation that they expect to reach the level this year
Net worth	Bank and brokerage statements, CDs, tax assessments or appraisals, plus a consumer report from a nationwide agency, all dated within the prior three months, plus a written representation that all liabilities are disclosed
Third-party letter	Written confirmation within the prior three months from a registered broker-dealer, an SEC-registered investment adviser, a licensed attorney in good standing, or a CPA in good standing
Previously verified	A written representation at the time of sale that they remain accredited, which the rule allows for people the issuer verified earlier, for up to five years

The details are in the text of Rule 506(c)(2)(ii). For couples, joint income or net worth calls for documentation and representations from both spouses.

The March 2025 high-minimum guidance

In a March 12, 2025 no-action response, SEC staff agreed an issuer could reasonably conclude it took reasonable steps when the purchaser meets a high minimum investment and gives written representations. The dollar figures come from the request letter the staff answered, which proposed a $200,000 minimum for natural persons and $1,000,000 for legal entities, and law firm summaries such as Dechert's report them the same way. That request also offered alternatives for an entity accredited only because all its owners are accredited, so the details matter.

The purchaser must represent that they are accredited and that the minimum is not financed by a third party for the purpose of investing. The issuer must also have no actual knowledge that the representations are false. This is staff guidance, not a rule, and it does not change what the rule requires.

For most creator-led apartment raises, minimums are lower than $200,000, so document or letter-based verification is the more common path. See accredited investor verification for the practical side.

What does a 506(c) raise look like step by step?

A creator-led 506(c) raise runs in a fixed order, and verification and escrow come before any money moves.

Pick the deal and the entity. A specific property under contract, held in its own LLC.
Prepare the offering documents with a securities attorney, including the risk disclosure. Our private placement memorandum guide explains what goes in them.
Say who the deal is for. Every public call to action should state that it is open only to accredited investors.
Send people to one deal page with the terms, fees, risks and documents.
Verify each investor before you accept subscription documents or money.
Hold funds in escrow until closing, with an independent escrow agent.
File Form D within 15 days after the first sale, plus any state notices.

A worked example (illustrative)

Here is what verification does to a funnel. These numbers are illustrative, not data from any real raise.

A creator's video and newsletter produce 100 people who ask for the deal documents. Suppose 40 are accredited and willing to share verification documents, and the other 60 are non-accredited or decline. At an average of $30,000 each, 40 x $30,000 = $1,200,000 of equity.

Now suppose the sponsor needs $1,200,000 and sets a $200,000 minimum so the high-minimum guidance applies. At $200,000 each it takes 6 investors (6 x $200,000 = $1,200,000), but far fewer followers can write a check that size. The sponsor would probably trade a broad base of $30,000 investors for a handful of larger ones, which is a different business.

The point: in 506(c), the funnel narrows at verification, not at the video. Plan for that drop-off in your timeline and your equity target.

What does your public content still have to do?

Public content in a 506(c) raise must be accurate, because the antifraud rules apply to every securities offering. Rule 10b-5 makes it unlawful to make an untrue statement of a material fact, or to omit one needed to make statements not misleading, in connection with buying or selling a security.

Two practical consequences follow. First, anything you say about returns, track record or risk is part of the offering. Second, if an issuer, underwriter or dealer pays you to publish a communication describing a security, Section 17(b) of the Securities Act requires you to disclose the payment and its amount.

Our guide on what creators can say about a real estate deal has example wording. The creator liability post covers the enforcement and litigation record.

What filings come after the first sale?

Rule 506(c) is a federal exemption, but it still comes with a notice filing, state notices and a bad actor check. Each has its own timing.

Form D: due no later than 15 calendar days after the first sale, filed electronically, under Rule 503. See our Form D filing guide.
State notices: federal law preempts state registration for Rule 506 offerings, but states can require notice filings and fees. Timing and fees vary by state, so verify each one. See blue sky notice filings.
Bad actor check: Rule 506(d) disqualifies offerings when certain covered persons have disqualifying events, such as certain convictions, injunctions or regulatory orders. See the bad actor rule guide.

Our take

Our take: for a creator with a public audience, Rule 506(c) is usually the cleaner path, because it removes the need to prove a relationship with each follower. You trade that for verification, and we think that trade is worth making.

We also think creators should decide on the exemption before they film anything. A video recorded for a 506(b) plan and then used to find investors is the kind of problem that is hard to undo.

We would keep the educational content and the offering content clearly separate, and save every public post that mentions the deal. Treat your channel as part of the offering file.

Trade-offs and who this is not for

Verification adds friction, and some accredited followers will drop out rather than share financial documents. That is the cost of public marketing.

Not for creators whose audience is mostly non-accredited. A 506(c) deal cannot take their money. See non-accredited followers and real estate options.
Not for creators who want to skip verification for people they trust. The rule applies to every purchaser.
Not for creators who cannot document who they paid. Paid promoters and finders raise Section 17(b), bad actor and broker registration questions. See paying capital raisers.

Common mistakes to avoid:

Taking one non-accredited check "just this once." A single non-accredited purchaser can put the exemption at risk for the offering, so ask counsel before you consider it.
Posting returns without assumptions. A projected number in a caption can become evidence of what you promised.
Collecting money before verification. Verify first, then accept funds into escrow.

How DoorRaise fits in

DoorRaise helps sponsors raise equity for apartment buildings with 5+ units from people who already trust them, under Rule 506(b) or 506(c). It is software, legal document preparation, escrow coordination and verification services. We are not a law firm, broker-dealer, investment adviser, funding portal, bank or escrow agent, and we do not hold investor money: funds go to an independent escrow agent named on each deal.

We charge three flat fees and take 0% of the raise or profits.

The $500 setup fee, due when you submit the deal, covers forming the deal's LLC, investor documents from attorney-approved templates, an escrow account in the deal's name, the deal page, live call sign-up, and accreditation checks on every investor.

The $5,000 closing fee, paid from the funds raised and only if the deal closes, covers attorney review of the offering documents, sponsor background, purchase contract, title and loan checks, and the Form D filing.

The $3,500 yearly fee covers bookkeeping, the tax return and K-1s while you own the property.

State filing fees are included in the $5,000 closing fee. If the raise does not close, you never pay the closing or yearly fee and every investor gets their money back from escrow. See flat-fee pricing for details.

Ready to raise? Create your free sponsor page or see pricing.

FAQ

Yes, general solicitation is allowed under Rule 506(c) if every purchaser is accredited and you take reasonable steps to verify it. The posts must still be accurate and not misleading.

Is a self-certification box enough under 506(c)?

No. The rule requires reasonable steps to verify, such as document review, a letter from a professional, or the high-minimum approach in the March 2025 staff letter. A checkbox alone does not do that.

Do I have to verify every follower?

Only the people who invest. But you cannot accept money from a purchaser you have not verified, so build verification into the sign-up flow.

Can I switch to 506(b) after promoting publicly?

Only for people you had a substantive relationship with before the 506(b) offering began, per SEC staff guidance from January 2026. See whether followers can invest under 506(b).

What if my followers are not accredited?

A 506(c) offering cannot take their money. Other routes exist, such as a limited number of sophisticated non-accredited investors under 506(b) or Regulation Crowdfunding, each with its own limits.

Do I need a securities attorney?

We think so. Verification method, offering documents and public statements all turn on facts, and DoorRaise does not give legal advice.

Sources

This article is general information, not legal, tax or investment advice. Talk to a securities attorney before you market an offering. DoorRaise is not a law firm, broker-dealer, investment adviser or funding portal.