How to Raise a Fund From Your Own Community in 2026

This article is general information, not legal, tax, securities or investment advice. Laws, rates and programs change, and the details here may no longer be current. Confirm anything you plan to act on with your own counsel and accountant.

A community that already trusts you can fund your first deal legally, as long as the money comes in through a structure that exists before the first dollar moves. The exemption that fits is Rule 506(b). It allows unlimited accredited investors and up to 35 non-accredited investors, with no general solicitation, which suits friends, students and members you already know.

What a decade of trust looked like before it was a fund

Dr. Roberta Hoskie ran an investor community of women for about ten years before she raised a fund from it. She had trained them in wealth strategy, real estate investing and group economics through the Millionaire Mindset Sisterhood, and most of them were not accredited investors. That last fact shaped everything. Her first project was ten modular homes in Altoona, Pennsylvania, at roughly $1.5M in total project cost.

She came to Raises.com® with committed interest and a deal, and without a vehicle that could legally take the money. She had drafted her own private placement memorandum. She had also offered return tiers she designed herself. She worked with Raises.com® to convert all of it into a Rule 506(b) structure with a legal opinion, a certified cap table, a separate SPV for each project and a six-document investor package.

1. Write the returns you promised into the documents

Hoskie's first terms were spoken before they were written. She had offered her community $10,000 at 10% a year, $20,000 at 12%, and $50,000 at 12% plus a 10% share of net profit across that tier, with capital held for three years. What she designed by instinct, without a name for it, is a preferred return with a hurdle above $50,000. She got it right.

Terms offered in conversation are securities terms, whether or not anyone calls them that. They belong in the operating agreement and the disclosure. Any change belongs in a written amendment. Hoskie had promised one tier an extra 2%, so her package added an ROI agreement amendment that turned the promise into a document. Your friends will remember what you said.

2. Replace the homemade PPM before anyone signs

Hoskie was candid about her own draft. On the first substantive call she said she had written the private placement memorandum herself, that most of her investors were non-accredited, and that she knew she had to cap them at about 35. Then she added, "I'm not an attorney."

In a community raise the PPM does a second job. It is the written proof that you told your own people what could go wrong, which is the proof you want if a project slips and a friend asks why. Rule 502(b) sets out what non-accredited investors must receive, including financial statement information. A homemade draft has to meet that rule too.

The documents also have to match the exemption. The first draft of Hoskie's package was written to Rule 506(c), which shuts non-accredited investors out entirely, and every document was moved to 506(b) before her community could come in. Read every page for the exemption it cites.

Paying fees with nothing to show is the opposite mistake. Almas Mohammed, a private investor, spent $30,000 on traditional services before working with Raises.com® and called that stretch a "never-ending sunk cost fallacy of fees". Spend once, on a structure that matches the exemption, before the money arrives.

3. Certify the cap table and give each project its own SPV

Community money arrives as checks, transfers and promises. Without a certified cap table, a year later the only record of who owns what is a bank statement and a group of people remembering different numbers. Hoskie's was certified with the document set. Each project sits in its own special purpose vehicle, starting with the Altoona SPV, so one project's risk and one project's investors stay walled off from the next.

The order matters as much as the documents. An investor reads the PPM, signs the questionnaire that fits their status and signs the subscription agreement. Only then does the sponsor open the fund's bank account under the vehicle and get the EIN. Then the money comes in. As it was put to Hoskie on a June 9 call, "the moment you take money from an investor is the moment you start to owe them money on their returns."

4. Use the exemption that lets your community in

Rule 506(b) permits unlimited accredited investors and up to 35 non-accredited ones. Each non-accredited investor must be able to evaluate the risk, alone or with a purchaser representative, and must receive the disclosure Rule 502(b) requires. What 506(b) forbids is general solicitation. You can raise from people you already know, and you cannot advertise the offering to the public.

Hoskie's case file calls the fork between 506(b) and 506(c) an exemption conflict that sits under almost every community-funded first raise. Rule 506(c) would have let her market to accredited investors past her own network, and it would have locked out the women who had backed her for a decade. It looked like loyalty against scale. She refused to drop them: "I want them to see wealth. I want them to understand the power of us moving together as a unit."

The answer was a sequence. A first 506(b) tranche admits the non-accredited community and funds the proof-of-concept project, and an accredited vehicle with marketing permitted follows once the prototype stands. The community gets in first. The fund still scales.

5. Hold the money until the vehicle can take it

The hardest money to refuse comes early, from your own people. Hoskie had verbal commitments and a project waiting on them, and she did not take the money before the structure existed. Her reason, on a recorded call on June 4, 2026: "I want to do it the right way. That's why I've been holding out."

A sponsor who takes community money first and builds the structure afterward is unwinding a completed securities offering. A sponsor who waits is getting organized. Section 12(a)(1) of the Securities Act gives an investor who bought in an offering that was neither registered nor exempt the right to ask for their money back. With strangers, that is a legal problem. With your own community, it also ends a relationship you spent years building.

Community money on a promise vs through a 506(b) structure

Frequently asked questions

Can non-accredited friends and family invest in my fund?

Yes, under Rule 506(b) up to 35 non-accredited investors can invest alongside unlimited accredited ones. Each must be able to evaluate the risk, alone or with a purchaser representative. Each must receive Rule 502(b) disclosure.

Can I post about my fund to my community on social media?

Not under Rule 506(b), because a public post is general solicitation. Raise from people you have a pre-existing, substantive relationship with, which is the line SEC staff guidance draws. Rule 506(c) allows marketing, to accredited investors only.

Do I need a separate SPV for each project?

You need one if you want a problem on one project kept away from the next project's investors. Hoskie gave every project its own SPV for that reason.

Do I have to file anything with the SEC for a 506(b) raise?

Yes, a Form D, due within 15 days of the first sale under Rule 503. States can require their own notice filings too. Hoskie's Form D was filed with the SEC.

Raises.com® builds the structure a community raise needs: the PPM, the subscription and operating agreements, the CFA financial proformas and the data room. The raise is then legally and financially sound before anyone you know wires a dollar. Start at https://raises.com/buy-a-business, or book a strategy call with an advisor at https://raises.com/call.

General information, not legal, tax, securities or investment advice. Laws, rates and programs change, and the details here may no longer be current. Confirm anything you plan to act on with your own counsel and accountant.