Jul 29, 2020
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.
In raising equity funding, you can only raise from investors who are accredited. The Securities and Exchange Commission (SEC) establishes the criteria for those who are accredited.
You can see the specific requirements on the SEC website. Just search online for ‘sec accredited investor’ and it will come up.
The rules were set in 1968 and have changed only once since then.
In short, it’s anyone who has a net worth of $1M dollars, not counting the house they live in.
There’s also an exemption that allows up to 35 non-accredited investors to invest in your startup. This allows for family and friends funding.
There’s no formal process for achieving accreditation, as most angel groups and startups raising funding require you to ‘self-declare’ accreditation.
There are two ways non-accredited investors can invest in startups: Title III crowdfunding platforms and Reg A+ offerings.
These require specific requirements such as licensing for the crowdfunding platform, and registration for Reg A+ fundraise.
They provide compliance work to
allow for anyone to invest in a startup.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.
Let’s go startup something today.
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