October 23, 2026
You can talk publicly about your company, but not about a raise that is still open, unless you use an exemption that allows it. Most startup rounds rely on Section 4(a)(2) or Regulation D. Section 4(a)(2) and Rule 506(b), the Regulation D exemption most rounds use, both prohibit general solicitation, which includes a "we're raising" post on LinkedIn, a public pitch event or a mass email to strangers. If you want to advertise the round, Rule 506(c) allows it, but then every investor must be an accredited investor and you must take reasonable steps to verify it. Demo days run by accelerators, universities and angel groups can be safe under Rule 148 if the event meets its conditions, and announcing a round after it has closed is generally fine.
Key takeaways
The federal securities laws require every offer and sale of securities to be registered with the SEC or exempt. SAFEs, convertible notes and preferred stock are all securities. General solicitation is offering those securities by means of general advertising or broad outreach: any communication that offers the securities to people you don't already know, through a medium that reaches the public. The SEC looks at substance, not labels. A post that says "we're raising our seed round, DM me if you'd like to see the deck" is an offer, even though it doesn't name a price.
The test focuses on the offer, not just the sale. Soliciting the public can destroy the exemption for the whole round, even if every person who actually invests is a long-time contact.
Three exemptions cover almost every startup round.
Section 4(a)(2) of the Securities Act exempts transactions "not involving any public offering." It has no detailed rules, which makes it flexible and uncertain. Courts look at whether the investors can fend for themselves, meaning they are sophisticated and have access to the kind of information registration would provide, and at the number of offerees and the manner of the offering. General solicitation is inconsistent with it.
Rule 506(b) is a safe harbor under Regulation D. You can raise an unlimited amount from an unlimited number of accredited investors and up to 35 non-accredited investors in any 90-day period. Each non-accredited investor must be sophisticated, alone or with a purchaser representative, and must receive disclosure documents that include financial statement information similar to a Regulation A offering. That disclosure burden is why most startups take money only from accredited investors. No general solicitation is allowed. See Can Our Startup Raise Money from People Who Are Not Accredited Investors?
Rule 506(c) permits general solicitation, but every purchaser must be an accredited investor and the company must take reasonable steps to verify each purchaser's status. A checkbox is not enough. The traditional methods are reviewing tax returns or bank and brokerage statements, or getting a written confirmation from the investor's lawyer, accountant, registered broker-dealer or investment adviser. In a no-action letter dated March 12, 2025, SEC staff said a company can also rely on a minimum investment of at least $200,000 for an individual or $1,000,000 for an entity, together with the investor's written representations that it is accredited and that the minimum investment isn't financed by a third party for the purpose of the investment, as long as the company has no actual knowledge to the contrary. That makes 506(c) workable for larger checks. It does little for a round of $25,000 angel checks.
| Question | Section 4(a)(2) | Rule 506(b) | Rule 506(c) |
|---|---|---|---|
| General solicitation allowed? | No | No | Yes |
| Who can invest? | Sophisticated investors with access to information | Unlimited accredited plus up to 35 non-accredited in 90 days | Accredited investors only |
| Verification of accredited status | Not applicable | Reasonable belief, usually a questionnaire | Reasonable steps to verify, such as documents or a $200,000 or $1,000,000 minimum with representations |
| Disclosure to non-accredited buyers | Access to information | Required, including financial statements | Not applicable |
| State securities laws | Not preempted, so a state exemption is needed | Preempted, notice filings only | Preempted, notice filings only |
Depending on the type of fundraise, you may need to file a Form D and state blue sky filings.
Not if it fits Rule 148, which the SEC adopted in November 2020. A communication at a seminar or meeting is not general solicitation if more than one company presents and the event is sponsored by a college, university or other institution of higher education, a state or local government, a nonprofit, or an angel investor group, incubator or accelerator. The conditions are specific.
The sponsor can't make investment recommendations, negotiate investments between companies and attendees, charge attendees more than reasonable administrative fees, or receive compensation for introductions or for negotiating. The event's advertising can't mention any company's specific offering. What you say about your round at the event is limited to the fact that you are raising or plan to raise, the type and amount of securities, the intended use of proceeds and the unsubscribed amount. You can pitch the business as fully as you like, but leave valuation, cap and detailed terms for private follow-up meetings. If people can attend online, attendance must be limited to the sponsor's members or associated people, people the sponsor reasonably believes are accredited investors, and people the sponsor invites based on industry or investment-related experience, chosen reasonably and in good faith and disclosed in the event's public materials.
An event that misses these conditions, such as a public livestream where you announce your raise or a pitch competition run by a for-profit organizer that takes a fee for introductions, can still be general solicitation. Ask the organizer how the event is set up before you put your round on a slide.
The safest way to show you didn't solicit generally is to offer the round only to people you already have a pre-existing, substantive relationship with. "Substantive" means you know enough about the person's financial circumstances and sophistication to judge whether they are a suitable investor. "Pre-existing" means the relationship existed before you made the offer.
In the 2015 Citizen VC no-action letter, SEC staff said the quality of the relationship matters more than how long it has lasted, and that no specific length of time is required. Citizen VC, an online venture platform, qualified members through a questionnaire and a getting-to-know-you process before showing them any investment. Staff accepted that approach on those facts. For founders, this means a former colleague who invested in your last company is a safe call, while someone who followed you on social media last week is not, unless you take the time to learn about their finances and experience before discussing the round. A private meeting set up through a warm introduction is the ordinary way founders reach investors without soliciting generally.
Announce a closed round. A post, press release or interview after the round has closed, saying who invested and how much, is generally fine, as long as it doesn't invite more investment. "We've closed our $2,000,000 seed, and there's still room for a few more investors" reopens the problem.
Don't post that you are raising. A LinkedIn update or a thread on X saying you are raising, sharing the deck publicly or inviting investors to reach out is general solicitation. So is pitching the round at a public event that doesn't meet Rule 148.
Talk about the business freely. Podcasts, newsletters, conference talks and press interviews about your product, customers, hiring and vision are fine, provided you don't mention the open round, its size or terms, or invite investment. Keep a short script for the moment someone asks "are you raising?": "We're always happy to talk to investors privately."
Be careful with cold outreach. A personal email to a venture fund that invests at your stage is how many founders start, and funds are institutional investors that expect it. A mass email to a purchased list of individuals, or an open invitation on your website, is general solicitation.
Stop the public posts and talk to a lawyer before you take more money. You have two main paths. You can switch to Rule 506(c): sell only to accredited investors and verify every one of them, including people who would have qualified under 506(b) without verification. Or you can keep to Rule 506(b) for a later offering, but under the SEC's integration rules you must have a reasonable belief that each purchaser either was not solicited through the general solicitation or had a substantive relationship with the company before the 506(b) offering began. Simply waiting 30 days is not enough on its own. If you have already sold to non-accredited investors after soliciting, the analysis gets harder, and you need advice on the specific facts. Equity crowdfunding under Regulation Crowdfunding is another route that allows public advertising, with its own rules.
To go deeper, read our Founder Guide: SAFE and Founder Guide: Seed Funding.
For more, see Can Our Startup Raise Money from People Who Are Not Accredited Investors?, Equity Crowdfunding, How Do I Find the Right Angel Investors? and Should My Startup Join an Accelerator?
If you want to talk publicly about a raise that's still open, contact us before you post.
