What is the difference between a Rule 506(b) offering and a Rule 506(c) offering?

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The difference between a Rule 506(b) offering and a Rule 506(c) offering under Regulation D of the U.S. Securities and Exchange Commission (SEC) follows:  

1. Rule 506(b) Offering: 
   - Accredited and Non-Accredited Investors: In a Rule 506(b) offering, issuers can raise capital from both accredited and non-accredited investors. However, if non-accredited investors are included, the issuer must meet certain disclosure requirements, and there are limitations on the number of non-accredited investors that can participate.
   - No General Solicitation: Issuers are not allowed to engage in general solicitation or advertising to attract investors. The offering is typically limited to a pre-existing network of investors.
   - Self-Certification: Investors can self-certify their accredited investor status, and the issuer does not have the same obligation to verify the accredited status of investors as required in Rule 506(c).

2. Rule 506(c) Offering:
   - Accredited Investors Only: In a Rule 506(c) offering, issuers are allowed to solicit and advertise the offering to the general public. However, they can only accept investments from accredited investors.
   - Verification of Accredited Status: Unlike Rule 506(b), Rule 506(c) requires the issuer to take reasonable steps to verify that investors are accredited. This verification process adds an extra layer of due diligence.
   - No Limit on Offering Amount: There is no specific limit on the amount of capital that can be raised in a Rule 506(c) offering.

In summary, the key differences between Rule 506(b) and Rule 506(c) offerings lie in their approach to investor eligibility, solicitation methods, and the verification of accredited investor status. Rule 506(b) allows for a broader pool of investors but restricts advertising, while Rule 506(c) permits general solicitation but limits investors to accredited individuals or entities.