Imagine you’re a startup founder in the middle of a capital raise. Revenue is climbing. A few well-known angels are in the round, so you refresh your website to highlight your company’s momentum: “Rapid national expansion.” “Backed by experienced investors.” “Join us as we scale.”

It feels like smart positioning. You’re not blasting out offering documents or running ads that say “Invest here.” You are just telling your story. Two months later, your outside counsel says the SEC may view your website updates as a general solicitation. The Rule 506(b) exemption from expensive securities registration you are relying on could be at risk.

This is not a rare horror story. It is one of the most common and preventable compliance mistakes growth-stage companies make.

Rule 506(b) of Regulation D [17 CFR § 230.506(b)] remains one of the most commonly used capital-raising exemptions in the United States. It allows issuers to raise an unlimited amount of capital from accredited investors (and up to 35 sophisticated non-accredited investors), without the heightened verification requirements imposed by Rule 506(c) [17 CFR § 230.506(c)]. The tradeoff is straightforward: no general solicitation and no general advertising.

For many companies, the website is the single greatest source of unintentional risk. Marketing teams often view website content as routine brand promotion. In the context of compliance with 506(b), however, that same content can be characterized as an unlawful general solicitation or advertising for a public offering. If you are conducting—or contemplating–a 506(b) raise, your website must be carefully structured to avoid crossing the line.

What Constitutes General Solicitation

General solicitation may include communications that are publicly available and that offer securities or condition the market for an offering of securities. Public websites, unrestricted investor decks, open-access webinars, broadly distributed press releases about offering terms, and social media posts referencing the raise may all constitute impermissible general solicitations.

The SEC focuses on substance over labels. Generally, if a communication is publicly accessible and could reasonably be viewed as inviting investment, it presents a risk. Under 506(b), securities may be offered only to investors with whom the issuer (or its placement agent) has a pre-existing, substantive relationship. In other words, the issuer has developed, through prior interactions and sufficient inquiry, enough of a relationship to reasonably evaluate the prospective investor’s financial circumstances and sophistication to determine eligibility for the offering. A public website cannot normally be used to instantly create that relationship.

Remove Offering Terms from Public Pages

By way of general guidance, the types of information below should not appear on publicly accessible pages during a 506(b) offering:

• The fact that you are raising capital
• Valuation or pricing
• Minimum investment amounts
• Targeted returns
• Deal structure
• Closing timelines
• Calls to “invest now” or similar language

General business information is permissible. Descriptions of products, services, leadership, markets, and factual milestones are appropriate. What creates problems is tying that information to an invitation to invest in the securties.

Even indirect promotional phrasing can be problematic. Language suggesting “now is the time to participate” or encouraging readers to “join our investors” is not subtle—it is likely solicitation.

Use a Properly Structured Gated Investor Portal

If offering materials are to be shared online, they should be housed behind a password-protected portal accessible only after a substantive review process.

Key safeguards include:

• True password protection
• No automatic access upon form completion
• Documented review of the prospective investor
• Evidence that the relationship was established before the offer

A simple “enter your email to download the deck” approach does not satisfy 506(b). Nor does a checkbox confirming the investors’ accredited status. The relationship must be both pre-existing and substantive before offering materials are delivered.

Avoid Conditioning the Market Through Content Marketing

Blog posts, newsletters, podcasts, and press releases can unintentionally “condition the market.” While operational updates are permitted, framing, context and timing matters.

An acceptable statement is: “The company expanded into three new states this quarter.” Riskier is: “With expansion underway, investors have a limited opportunity to participate in our next phase of growth.” The first informs stakeholders. The second invites investment. During an active raise, heightened discipline is required in how business progress is communicated.

Coordinate Marketing and Legal Review

Most compliance failures occur when marketing operates independently of securities counsel. It is wise to implement:

• A review protocol for website updates
• Training for marketing personnel on offering restrictions
• Centralized approval authority for investor-related content

If a placement agent is involved, ensure that messaging is consistent and compliant across platforms. Their communications may be attributed to the issuer.

Monitor Social Media and Third-Party Coverage

Websites often link to executive social media accounts. If management is posting about the raise on LinkedIn or other platforms, those posts may be integrated with the company’s communications for regulatory purposes. Similarly, linking to press releases discussing the offering from your homepage may constitute general solicitation. The safest course during a 506(b) raise is to confine offering discussions to controlled, private communications.

What Happens If You Get It Wrong

Non-compliance is not a technical foot-fault. The consequences can be serious, including:

• Loss of the Exemption: If the SEC determines that general solicitation occurred, the issuer may lose the Rule 506(b) exemption. That can convert what was intended to be a private placement into an unregistered public offering, which may effectively eliminate your ability to raise financing for a period.
• Rescission Risk: Investors may have rescission rights, namely the right to demand their money back with interest. For companies that have already deployed capital, this can be financially destabilizing.
• SEC Enforcement: The SEC may pursue enforcement actions, which can result in penalties, cease-and-desist orders, and reputational damage. Even absent formal penalties, the investigative process itself is costly and disruptive. Cease-and-desist orders can themselves keep you from using the 506(b) exemption in the future, again significantly reducing your ability to privately raise capital.
• State Law Exposure: While Rule 506 preempts many state registration requirements, state regulators retain antifraud authority. State enforcement can follow perceived violations.
• Integration Issues: A failed 506(b) offering may taint subsequent raises. The SEC could view later offerings as integrated with the noncompliant raise, potentially jeopardizing future exemptions.
• Investor Litigation: Plaintiffs’ lawyers often scrutinize website statements in down markets. Aggressive online language can become Exhibit A in a securities fraud complaint.
• Impact on Future Capital Raises: Regulatory history matters. Institutional investors, placement agents, and underwriters routinely conduct diligence on prior offerings. A compliance misstep can complicate or derail future financings.
• Future Disclosure Operations: If considered material, a company must disclose to later investors its prior regulatory violations.

In short, the cost of aggressive marketing during a 506(b) raise can far exceed the perceived benefit.

If broad online marketing is central to your capital strategy, Rule 506(c)—which permits general solicitation but requires verified accredited investor status—may be more appropriate. Rule 506(b) is designed for relationship-driven private placements, not mass digital outreach. It would be wise to consult with outside counsel on this option.

Conclusion

Modifying your website for a 506(b) offering is not about concealing your business. It is about separating legitimate corporate promotion from securities solicitation.

Remove offering terms from public pages. Use gated portals for investor materials. Establish substantive relationships before making offers. Coordinate marketing and legal oversight. Maintain documentation.

If your website reads like a pitch deck and is accessible to anyone with an internet connection, you are assuming unnecessary risk. Discipline at the outset is far less expensive than defending an enforcement action later.