b'How to Legally Raise Private MoneyYou can have an unlimited number of accredited investors, and up to 35 non-accredited investorsAll investors must be sophisticatedNo advertising or general solicitation is allowed*A disclosure document (such as a private placement memoran-dum) is required if you allow non-accredited investorsA federal Form D filing is required within 15 days of the first saleThe exemption pre-empts state blue sky laws, but state notice of sales (with fees) in their jurisdiction is required, usually within 15 days of sales* The way to prove that you didnt advertise is to demonstrate that you had a pre-existing relationship with each investor before making an offer to invest. The subsequent chapter on Marketing Your Offering goes into detail aboutthe required relationships andhowto establish and document them. The Problem with Rule 506(b)Although large funds use registered investment advisers or the secu-rities broker-dealer community to raise funds for their private offerings, this channel is not typically available for smaller offerings, as investment advisers and broker-dealers typically wont market securities offerings of less than $10 million. Small issuers must develop direct relationships with prospective investors and sell securities on their own.The pre-existing relationship and non-solicitation provisions of Rule 506(b) have been a source of great confusion, misinterpretation, and a significant impediment to the ability of private issuers to fund their secu-rities offerings.Rule 506(c)Advertising AllowedRule 506(c) offers promotion opportunities for small issuers. Issuers under Rule 506(c) are able to advertise to anyone as long as they only accept verified accredited investors in their offerings and comply with the rest of the Rule 506(c) provisions. A description of the rules for the Rule 506(c) exemption follows: 56'