General solicitation is the process of publicly raising capital. There is a prohibition against general solicitation for marketing securities under Rule 506(b) of Regulation D. The SEC takes instances of general solicitation that are potentially outside of the proper process on a case-by-case basis.

Rule 506(c) and General Solicitation
Rule 506(c) has changed the process of conducting private placements. It permits issuers of securities to use general solicitation and advertising as long as they adhere to the Rule’s requirements. Although the requirements are strict, there are advantages to the issuer that utilizes Rule 506(c). It...