Companies raising capital that are relying on Rule 506(c) (often informally called “Accredited Investor Crowdfunding”) for their offering of securities have several options as to how to verify whether their investors’ are indeed “accredited investors.” Since most offerings of securities generally rely on Rule 506(b) which allows for the investor to self-verify (e.g., through a simple questionnaire), founders are not as familiar with the verification process of Rule 506(c). This post will briefly explain Rule 506(c) and describe some of the options companies have to verify its investors as accredited investors.
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About Taylor Wilkins
Taylor’s practice focuses on three main areas: business transactions and counsel, start-up companies, and private investment funds. Taylor assists business clients with the many different legal issues that arise during a business’s life cycle. Taylor helps businesses with formation, day-to-day legal issues, and exit strategies. Taylor also represents both buyers and sellers in mergers and acquisitions. Taylor also takes great pride in assisting start-up companies and entrepreneurs. Between undergraduate and law school, Taylor was privileged to participate in a program sponsored by Launch Tennessee. In this program, he was assigned the task of taking a new technology created by the University of Tennessee Research Foundation through an accelerator program to determine the technology’s viability as a start-up company versus licensing the technology to another company. Taylor learned first-hand the challenges entrepreneurs face when starting a technology-based business. This fueled Taylor’s passion to assist start-up companies with formation, capital raising, and everyday legal needs. In addition to assisting businesses and start-up companies in corporate transitions, fundraising, and mergers and acquisitions, Taylor also focuses on advising private investment funds. Taylor assists private funds with fund formation, structuring, and compliance issues.