Rule 506(b) vs. 506(c): A Practical Guide for Startup Founders
Rule 506(b) and 506(c) are the two Reg D exemptions that power almost all startup fundraising. Here's how they differ, when to use each, and the mistakes that get founders into trouble.
Startup law guidance on formation, fundraising, equity compensation, and exits.
Rule 506(b) and 506(c) are the two Reg D exemptions that power almost all startup fundraising. Here's how they differ, when to use each, and the mistakes that get founders into trouble.
Exercise too early and you risk cash on a company that might fail. Wait too long and you face a crushing tax bill. Here's a framework for making the decision — including why Washington residents face a closing window before 2028.
Convertible notes vs. SAFEs: how each works, key differences in terms and mechanics, and which instrument makes more sense for your early-stage startup funding.
How to negotiate startup equity as an employee: understanding your offer, asking the right questions, evaluating strike price and vesting, and avoiding common mistakes.
Double-trigger acceleration explained: what it is, how it works, when it applies, and why founders and key employees should insist on it in their equity agreements.
LLC vs. C-Corp for startups: key differences in taxes, QSBS eligibility, investor expectations, and how to choose the right entity for your company.
A living reference of 75+ startup law terms every founder should know — from 83(b) elections to QSBS, Reg D to vesting schedules, explained in plain English.
Accredited investor requirements for startups: income test $200k/$300k, net worth $1M (excluding your home), and SEC-approved credentials. Includes verification steps under Reg D (506(b)/(c)).
A practical comparison of the two most important Reg D exemptions — Rule 506(b) and 506(c). When to use each, how investor verification works, and how to avoid costly mistakes.
A comprehensive guide to Regulation D — the securities law framework that makes startup fundraising possible. Covers Rules 504, 506(b), and 506(c), accredited investor requirements, Form D, and common pitfalls.