Our guide to the integration doctrine, the differences between the two exemptions, and SEC Rule 152
Can You Do Both at Once?
Short answer: yes — but carefully. If the two offerings are mishandled, regulators can decide your “two” offerings are actually one offering. That mistake can cost you your exemption entirely, putting you at risk of having sold unregistered securities.
This guide covers four things: the integration doctrine, the classic five-factor test used to apply it, the key differences between 506(b) and 506(c), and the SEC’s 2020 “Rule 152” fix that gives issuers a safer path to run both at once.
What Is the Integration Doctrine?
Think of it as an anti-cheating rule. The SEC does not want a company to dodge registration requirements by splitting one big offering into several smaller ones, each technically fitting under an exemption that would not apply if the whole thing were looked at together.
The general principle is simple:
- An offering that starts privately must finish privately.
- An offering that starts under one exemption must finish under that same exemption.
There are a few exceptions to this general rule, the most important of which — Rule 152 — is covered later in this guide.
The Historic Five-Factor Test
Regulators have traditionally looked at five factors to decide whether two offerings should be treated as one combined offering:
- Are they part of the same overall financing plan?
- Are they selling the same class of securities?
- Are the sales happening at about the same time?
- Is the issuer receiving the same kind of consideration for both?
- Is the money being used for the same general purpose?
If most of these point to “yes,” the two offerings are at risk of being integrated and treated as one.
506(b) vs. 506(c): The Key Differences
| 규칙 506 (b) | 규칙 506 (c) | |
|---|---|---|
| Advertising / general solicitation | 허용되지 않음 | 허용 |
| 누가 투자할 수 있나요? | Unlimited accredited investors, plus up to 35 non-accredited “sophisticated” investors | 공인 투자자만 |
| Verifying investor status | Investors self-certify | Issuer must take active, third-party steps to confirm accredited status |
Why This Matters for Running Both at Once
A common path is to start with a 506(b) raise and later transition to 506(c). The tricky part is doing both simultaneously.
If the integration doctrine applies, the law applies whichever offering has the stricter rules — in this case, 506(b). That means any advertising done under the “506(c)” offering could suddenly look like illegal general solicitation under 506(b) rules, putting the exemption for the entire combined offering at risk.
The Fix: SEC Rule 152 (the 2020 “Harmonizing” Rule)
In 2020, the SEC introduced Rule 152 specifically to address this gray area. The core idea, in plain terms:
Two offerings will not be integrated if, based on the facts and circumstances, an exemption is independently available for each one.
Two practical pieces make this work:
- Keep the 506(b) offering clean. As long as the issuer maintains a genuine, pre-existing, substantive relationship with its 506(b) investors and avoids any general solicitation for that offering, it stays protected — even while simultaneously advertising a separate 506(c) raise.
- 30-day buffer. Any offering that starts more than 30 days before, or after, another offering will not be integrated with it. This is a major improvement: before Rule 152, issuers needed a 90-day gap between offerings to avoid integration.
중요 제한 사항: Rule 152’s safe harbor cannot be used as a workaround to quietly run general solicitation inside what is supposed to be a no-solicitation 506(b) deal. Doing so still risks losing the exemption and unlawfully selling unregistered securities.
히프 라인
Yes, an issuer can run 506(b) and 506(c) offerings concurrently. To do it safely:
- Keep the two investor pools and communications genuinely separate
- Never let solicitation touch the 506(b) investor pool
- Use the 30-day buffer if launching the offerings close together
- Document the substantive, pre-existing relationships behind the 506(b) raise
This summary is for general informational purposes and is not legal advice. Issuers should consult securities counsel before structuring concurrent offerings.
Manhattan Street Capital is not a law firm, valuation service, underwriter, broker-dealer, or Title III crowdfunding portal, and we do not engage in any activities requiring any such registration. We do not provide advice on investments. Manhattan Street Capital does not structure transactions. Do not interpret any advice from Manhattan Street Capital staff as a replacement for advice from service providers in these professions. When Rod Turner provides advice, it is based on his observations of what works and what does not from a marketing perspective in online offerings. Rod does not tell the audience what to do or how to do it. He advises the audience on what is most likely to be cost-effectively marketed online. The choices of all aspects of companies’ offerings are made by the companies that make the offerings.
로드 터너
로드 터너는 맨해튼 스트리트 캐피털(Manhattan Street Capital)의 설립자 겸 CEO로, A+ 규정을 활용하여 성숙한 스타트업 및 중견기업의 자금 조달을 지원하는 업계 1위 성장 자본 서비스 제공업체입니다. 터너는 시만텍/노턴(SYMC), 애쉬튼 테이트, 마이크로포트, 놀리지 어드벤처 등 여러 성공적인 기업을 육성하는 데 핵심적인 역할을 담당했습니다. 그는 벤처 캐피털 회사(어바인 벤처스)를 설립하고 블룸, 에이미리스(AMRS), 애스크 지브스, eASIC 등에 엔젤 투자 및 메자닌 투자를 진행한 경험이 풍부한 투자자이기도 합니다.
