You can invest in two types of syndication offerings: 506b and 506c.
- 506b allows the sponsor to raise money from non-accredited investors who have a pre-existing relationship with the sponsor, such as family or friends. However, Syndication sponsors cannot advertise any specific investment offering to the public.
- 506c allows the sponsor to raise money from only accredited investors. Accredited investors are those who have a net worth of at least $1 million (excluding their primary residence) or an income of at least $200,000 for the last two years (or $300,000 with a spouse). Syndication sponsors can advertise specific deal offerings.
So, if you want to invest in syndication, you need to either qualify as an accredited investor under 506c or have a close connection with the sponsor under 506b. This is to ensure that you have enough knowledge and experience to evaluate the risks and rewards of the investment.