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# Does Propel(x) use Regulation D?

Yes, offerings on Propel(x). are conducted under Regulation D, promulgated under the Securities and Exchange Act of 1933, as amended. Regulation D governs private placement exemptions, to allow companies to raise capital through the sale of equity or debt securities without having to register their securities with the SEC.

We work with startups that make use of either Rule 506(b) or Rule 506(c) exemptions. See [https://www.sec.gov/answers/rule506.htm](https://www.sec.gov/answers/rule506.htm) for more detail.

Under Rule 506(b):

* A company cannot use general solicitation or advertising to market the investment.
* A company may sell its securities to an unlimited number of “accredited investors” and up to 35 non-accredited investors who meet sophistication requirements.
* Self-certification of accredited investor status via a questionnaire is used in general, as the 506(b) exemption does not specify an accreditation process to verify the Investor’s accreditation status.

Under Rule 506(c):

* A company CAN use general solicitation and advertising to market the investment (i.e., visitors to the Propel(x). landing page can view high-level information about the offering without needing to sign up or sign in)
* However, all purchasers in the offering must undergo additional steps to verify their accredited investor status (i.e., providing W-2s, tax returns, bank and brokerage statements, credit reports, etc.) before making an investment.