Definition
General Solicitation
Publicly advertising a private offering, which is permitted under Reg D 506(c) but not 506(b).
General solicitation means marketing a private securities offering to the public rather than to people the sponsor already knows: posting a deal on a website, tweeting an allocation, pitching at an open demo day, or emailing a purchased list. Under Rule 506(b) it is prohibited, and sponsors must rely on a pre-existing substantive relationship with each investor. Under Rule 506(c) it is allowed, but the trade-off is that every investor must be a verified accredited investor, with verification by a third party or documentary review rather than a self-certification tick-box. The distinction catches sponsors out most often when a 506(b) deal gets shared onward in a public group chat or newsletter, which can be treated as solicitation after the fact.