A private placement may be sold to a maximum of how many non-accredited investors?

In private placements, there are specific regulations set by the Securities and Exchange Commission (SEC) concerning accredited and non-accredited investors. A key rule stipulates that private placements can involve up to 35 non-accredited investors. This limit is designed to ensure that companies raising capital through private placements can maintain a certain level of sophistication among their investors, since non-accredited investors may not have the same level of financial knowledge or experience as accredited ones.

Allowing up to 35 non-accredited investors encourages broader participation while still protecting these individuals from potential risks associated with private investments. This helps to balance the interests of issuers looking for capital and the need to safeguard less experienced investors from speculative ventures.

Understanding this limit is essential for determining compliance with securities regulations when structuring a private placement. The numerical limitation reflects a regulatory approach aimed at investor protection without imposing overly burdensome constraints on capital formation.