93% of private raises took money from wealthy people only

Most founders start with a mental list of everyone who might put in the first money. A former boss. An uncle who did well. Two friends from the industry.

The filings suggest that list is mostly unusable, and for a reason that has nothing to do with whether those people want to invest.

Across 11,548 original Form D filings from operating companies in the last 18 months, only 6.9% included a single non-accredited investor. Ninety-three percent of these raises took money exclusively from people who were already wealthy enough to qualify.

What "accredited" actually requires

An individual qualifies if they have net worth over $1,000,000 excluding their home, or income over $200,000 for the last two years — $300,000 jointly with a spouse — with a reasonable expectation of the same this year. Since 2020 certain securities licences also qualify someone regardless of wealth.

That is the bar. Most people any first-time founder knows do not clear it.

Rule 506(b) allows non-accredited investors. Almost nobody accepts them.

This is the part worth sitting with.

Rule 506(b) — the exemption used by 10,637 of these filings, 92% of the population — explicitly permits up to 35 non-accredited investors. The law does not forbid taking your former boss's money.

It was used that way in 6.3% of 506(b) raises.

The reason is disclosure. Under 506(b), the moment one non-accredited investor participates, the issuer owes that investor a disclosure package closer to what a registered offering requires — including financial statements, audited above certain sizes. A company that would otherwise send a deck and a subscription agreement is suddenly producing audited accounts for one person putting in $25,000. Most counsel advise against it, and the filings show founders taking that advice.

Where it does happen: Rule 504

Rule 504 covers offerings up to $10 million and is far more permissive about who may participate. Nearly half of 504 raises included non-accredited investors — but look at the scale. Two hundred filings against 10,637, and a mean amount sold of $623,666 against $13.3 million.

504 is the small door. It exists, it is genuinely used for community and employee raises, and it is a rounding error in the overall market.

Some raises that did include non-accredited investors:

• intellicents inc, Albert Lea MN — $4,920,000 from 11 investors, all 11 non-accredited (0002065343-26-000001)
• Refiant Inc., Dover DE — $4,889,998 from 7 investors, 3 non-accredited (0002107511-26-000001)
• Liberty Star Uranium & Metals, Tucson AZ — $4,327,273 from 26 investors, 5 non-accredited (0001493152-25-013206)

Among filings that reported a count, the median was two non-accredited investors. When founders do use the allowance, they use a little of it.

What this means if you are raising

Check before you promise. A founder who has verbally accepted money from someone who turns out not to be accredited has either created a disclosure obligation they did not plan for, or has to give the money back. Both are worse conversations than the one where you ask first.

The exemption you choose decides who can participate, and it is chosen at the start rather than adjusted later. That is a conversation with a securities lawyer, and it is cheaper before the first cheque than after.

"Friends and family round" is a description of relationships, not of regulation. Those friends still have to clear the same bar as anyone else, unless you deliberately structure the raise to allow otherwise.

Where this data is thin

The count field is unreliable; the yes/no field is not. Of the 793 filings reporting non-accredited participation, only 474 gave a number. All the percentages above use the explicit yes/no field, which is populated for every filing in the population. The medians use only the filings that gave a count, and say so.

A handful of filings look internally inconsistent — a small number report non-accredited participation under exemptions that do not permit it, or counts above the 35-investor ceiling. We have not named them. One field on one form is not enough to say a company broke a rule, and the alternative explanation is a filing error.

This is what was filed, not what was intended. A company that wanted to include non-accredited investors and was talked out of it looks identical here to one that never considered it.

Look up your own state

The Capital Source Map returns the companies that actually raised where you are, what they sold, how many investors bought, which exemption they used, and the accession number behind every figure.

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Source: SEC Form D filings, form type D only, 18 months to August 2026, operating companies only. TyRey Technologies is not a broker-dealer, investment adviser or law firm. Nothing here is an offer, a recommendation, or legal advice — accreditation, exemption choice and disclosure obligations are questions for your securities counsel, and the summary above is not a substitute for one.