Tagged: accredited

Perspective: Encourage Affordable Housing through “Community Investor” Crowdfunding Rules

Incentivize Affordable Housing through Crowdfunding Liberalization for Community Investors In recent decades, increases in urban employment and population have outpaced residential development in U.S. cities. Nationwide, from 1974 through 2008, the number of new homes exceeded the number of new households. But since 2009, the… Read More

NASAA Cautions About Fraud During COVID-19 Crisis, Reaffirms Opposition to Expansion of Accredited Investor Definition

Last week, the North American Securities Administrators Association (NASAA) cautioned an SEC Committee about the potential for fraud during the COVID-19 outbreak. NASAA is the lobbying group that represents state and provincial securities regulators. Christopher W. Gerold, NASAA President and Chief of the New Jersey Bureau… Read More

Perspective: Don’t Blame the SEC, the Definition of “Accredited Investor” Was Never the Problem

Recently, the Securities and Exchange Commission (SEC) proposed changes to the definition of “accredited investor.” Many issuers and intermediaries hoped the SEC would expand the definition of “accredited investor,” to include qualitative conditions, such as education, or by lowering quantitative thresholds, such as income and… Read More

Instant Gratification: InvestReady Provides Service to Verify Accredited Investor Status in Minutes

In the US, crowdfunding under Reg D (506c) requires proof that the investor is “accredited.” To be accredited, an individual must earn over $200,000 a year or have a net worth of $1 million or more (minus their primary residence). While the rule is widely… Read More

Quote: Private capital raising is now outpacing capital raising in our public markets, yet our Main Street investors have no effective access to investments in private capital offerings

In the US, the definition of an “Accredited Investor” is an individual who earns over $200,000 a year or has $1 million in net assets minus their primary residence. If you are married, that number moves higher. Yet, as it stands today, this definition does… Read More

While the Uber IPO May have Stumbled, Early Investors Still Killed it

Early stage investing is a very risky endeavor yet this is where most of the big money is made. Today, an initial public offering (IPO) is too frequently more of an exit opportunity than a chance to generate wealth as companies wait as long as… Read More

Diminishing IPOs in US Depriving Average Investors

The President of the Chartered Financial Analyst Institute, Paul Smith, has taken to the media to call out shrinking IPO markets in the US and call for the restoration of fair and secure investment opportunities for retirement savers. Smith points at “alarming changes” in US… Read More

SEC Looks to Address “Patchwork” of Private Offering Exemptions, Staff to Comment on Accredited Investor Definition

During the 37th annual Government-Business Forum on Small Business Capital Formation, Securities and Exchange Commission (SEC) Chair Jay Clayton opened the event with a couple of interesting statements. Clayton commented on the byzantine ecosystem that has emerged, over many decades of legislation and rulemaking, for issuers… Read More

Paper: Two Bills in Congress May Fix the Profoundly Flawed Definition of Accredited Investor, but One Bill is Better

The current definition of an accredited investor is profoundly flawed and a travesty of rule making. Everyone knows it. As it stands today, an accredited investors must earn at least $200,000 (jointly $300,000) or have a net worth of $1 million beyond a primary residence…. Read More

Here is the Legislation that May Finally Fix the Definition of an Accredited Investor

The current definition of an accredited investor is an anomaly based on ease of enforcement and policy inertia. The statute dictates that accredited status is based on annual income or the size of an individual’s (or couples) bank account – yet everyone understands that wealth… Read More

Real Estate Investment Platform EquityMultiple Gives up on Reg D 506c Highlighting Shortcomings in General Solicitation Rule

EquityMultiple, a real estate investment platform that caters to accredited investors has bagged general solicitation or accredited crowdfunding. No longer will EquityMultiple publicly promote its real estate offerings online and elsewhere. Previously, EquityMultiple has leveraged Reg D 506c – a new securities exemption created by… Read More

Rule 506, Reg D: Two Ways to Conform with SEC Exemption Law

According to the Securities Act of 1933, any company that sells securities must either register with the Securities and Exchange Commission (SEC) or file for an exemption. The JOBS Act 2012 provides a way for companies to use crowdfunding as a means of selling securities,… Read More

2017 Holds Promise for Tax & Financing Policy for Startups

2016 brought with it many positive developments for startups in terms of capital access and tax policy. Investment crowdfunding finally went live, a number of bills to facilitate capital formation passed the House, and the startup community galvanized around a tax bill that would make… Read More

My 2017 Crowdfunding Wish List

2016 brought with it many developments in the crowdfunding industry, most notably the introduction of the long-awaited Title III crowdfunding. While admittedly not all crowdfunding legislation passed  was as influential, there have been significant strides made to improve existing securities regulations and to continue prying… Read More

Crowdfunding VC: Nin Desai Focuses on Investing in Tech

After years of working for firms like Merrill Lynch and Pacific Crest, Nin Desai decided to launch her own venture Nin.VC. Seeing opportunity in the JOBS Act of 2012 that legalized various iterations of crowdfunding, Nin launched a VC-hybrid firm that allows accredited investors access… Read More

An Explanation of Title II, Accredited Crowdfunding (Video)

The JOBS Act of 2012 legalized three different variations of investment crowdfunding. Title III or Reg CF, allows for anyone to invest in smaller companies that are raising up to $1 million.  Title IV, or Reg A+, allows issuers to raise up to $50 million… Read More

Reg D: Congress Must Act to Allow Sophisticated Investors Access to Private Placements

Under Reg D more than a trillion dollars is raised each year for companies that are not publicly traded. This market is huge – far larger than the annual rate of IPOs. Yet these private placements are only available to “accredited investors”: Individuals who earn… Read More

ACSEC Submits Final Recommendations on Definition of Accredited Investor

The SEC Advisory Committee on Smaller and Emerging Companies (ACSEC) has submitted its final recommendations to the Commission regarding the definition of an accredited investor. ACSEC has continued to advocate on behalf of its thesis that the SEC “should do no harm” and not reduce nor… Read More

Mary Jo White: SEC Staff Continues to Closely Monitor Reg CF, Reg A+

Two important elements of the JOBS Act are Title III and Title IV.  These two portions of the act created Reg CF, retail crowdfunding, and Reg A+, a scaled disclosure exemption for companies to raise up to $50 million.  In the opening remarks of the… Read More

Here is the Draft ACSEC Letter to the SEC on Definition of Accredited Investor

Below is the draft letter from the Advisory Committee on Small and Emerging Companies (ACSEC) regarding the definition of an Accredited Investor. The Committee is working on the details now with one of the suggestions being a test of sophistication that allows a work-around from… Read More

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