A Rule 506 private placement that ran a public ad creates two investor problems: those who invested before the ad have legal protection if you document pre-existing relationships, but those who invested after are tainted by the solicitation regardless of whether they saw it. Switching to Rule 506 for future investors doesn't fix the damage for earlier ones.
You ran an ad during a Rule 506 raise. Now you have 2 groups of investors and they're not in the same legal position. Group 1, investors who wired before the solicitation happened. They came in clean. You had a documented preexisting relationship. No public communication had gone out. Their position is the strongest. Group 2, investors who wired after the solicitation. Whether they personally saw the ad or not, the offering was already publicly solicited. Their position needs to be assessed. Switching to 506 going forward solves the problem for investors coming in after the switch, but it doesn't reach back to the original group that saw the ad. Group 1, while cleaner, is still sitting in an offering that can be challenged in its entirety because the taint applies at the offering level and not to individual investors. Just switch is only partial advice. You're dealing with a timeline. When the solicitation happened, who came in before, who came in after, what you can document about each relationship. That's a fact-specific analysis, not a checkbox. What that analysis looks like and what your options are is in the long form. See the link in the bio.
