Under SEC Regulation D Rule 506(c), only accredited investors may purchase securities directly in the offering. However, gifting some or all of those securities after purchase—even to a non-accredited individual—can be allowed, subject to important conditions:

Key Considerations:

1. Gifting is not the same as selling
   If the original accredited investor gifts their equity without receiving compensation or benefit, it is generally not considered a “sale” under SEC rules. Therefore, it wouldn’t trigger the need for the recipient to be an accredited investor under Rule 506(c).

2. No circumvention of investor limits
   The issuer (your company) must not use gifting as a backdoor to distribute securities to non-accredited investors during the initial offering. If it appears you are enabling non-accredited ownership indirectly, the SEC could view this as non-compliance.

3. No general solicitation or resale rights
   The gifted equity cannot be immediately sold or promoted publicly by the recipient. SEC Rule 144 restrictions on resale apply, and recipients typically must hold the securities for a period of time (usually 6–12 months).

4. Issuer’s responsibility ends at sale to the accredited investor
   Once the initial sale to an accredited investor is complete, you as the issuer are not responsible for the downstream transfer unless:

   • You facilitate or promote the gifting, or

   • The gift materially changes the structure or compliance of your offering.

5. Recordkeeping and disclosure
   It’s wise to document the accredited investor’s gift (e.g., gift letter or assignment form), and ensure your cap table reflects the transfer correctly. Consult legal counsel to draft a simple policy for post-sale transfers.

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Summary:

Yes, an accredited investor may gift equity purchased under a Rule 506(c) offering to a non-accredited person, as long as:

• It is a true gift, not a disguised sale;

• It does not form part of your distribution strategy;

• Your company did not solicit or facilitate the gift; and

• The gifted securities remain restricted and follow Rule 144 holding requirements.

Always consult securities counsel to ensure your gifting scenario does not inadvertently violate federal or state securities laws. Let me know if you want help drafting a gifting policy or shareholder agreement clause.