Do you know if you’re accredited or not?

Dear Angel Investor,

Nate Stavseth here. 

I just got back from the RagingBull Trader’s Summit in Orlando, Florida.

So many of my conversations in the foyers after sessions or during our cocktail party started with like this…  

“I’d love to get started with angel investing BUT you need hundreds of thousands of dollars to get started, right?”

1. NO. NO.

I don’t know where you are on your journey as an angel, but I’ve got to clear the air.

That’s just wrong. Yes, there was a time when you needed a high net worth (read: $1 million in assets) to even consider investing…

Those days are long gone.

You can actually start investing in angel deals TODAY with as little as $100 in some cases.

And what’s more, the performance of your investment is tied to the success of the startup, not the markets… 

 

What is Accreditation and When It Really Matters

 

In simple terms, accreditation is a status or qualification that’s applied to investors based primarily on their net worth. 

Accreditations vary per country and are issued by the security exchange and commission (SEC), capital market authority, investment authority, or any regulatory body overseeing investments. 

Accreditation status can be a barrier that must be overcome for certain deals… 

But it’s not a deal-breaker like it once was. 

 

Accredited Investor vs. Non-Accredited 

 

There are three major differences between accredited and non-accredited angel investors:

1. Differences in the types of investment opportunities that are available

2. There are more investment opportunities for accredited angel investors

3. The amount of money that non-accredited angel investors can invest is regulated based on a percentage of income/net worth

 

Accredited Investors

 

To qualify as an accredited investor, you must meet one of the two requirements:

1. Make $200k/year (single) or $300k/year (jointly) 

2. Have $1,000,000 in assets (excluding primary residence)

Meet the requirements? Be prepared to go through a verification process with the entity or platform you intend to invest through.

As an accredited investor, you’ll have more investment opportunities because… more people are willing to take your money! 

Beyond that though, you will have greater access to investment opportunities because accredited investors pose less of a perceived risk to the companies and individuals they invest in.

 

 

 

 

Accredited Investors Can Invest In the Following:

 

Regulation D Offerings:

  • Companies can sell equity freely as long as they are selling to accredited investors
  • Companies only need to file a “Form D” with the SEC, which is less work and less costly than a public offering

 

Regulation A Offerings:

  • These companies are generally trying to raise between $3 and $50 million
  • These offerings can be marketed

 

Regulation CF Offerings

  • Applies to crowdfunding
  • Can only be run through SEC-registered platforms

 

Non-Accredited Investors

 

Those who do not meet the accreditation criteria above fall under the “non-accredited” umbrella.

Before Title III of the JOBS Act was signed into law in 2016… if you weren’t an accredited investor your angel investing opportunities were limited to giving your nephew $25 to start a lemonade stand!

Ok–it wasn’t that bad. But you get the idea. You didn’t have a ton of options.

The JOBS Act made it possible for unaccredited investors to invest in startups through online crowdfunding platforms. This was a game-changer for startups and investors alike. 

At least, it was supposed to be.

Most of the investing population is made up of non-accredited investors. And for the first time in modern history, they had a shot at investing in the next generation of wealth-creating companies.

However, practically, it was still difficult for hardworking people to invest in the best startups. The crowdfunding platforms were overwhelming and often clogged with mediocre deals.

The super-rich and venture capital more or less kept their monopoly on the best startups.

This is exactly the problem we have been working to solve in The Boardroom. Our mission is to help everyday, hard-working people to get in on the ground floor of the next Airbnbs and Beyond Meats of the world.

 

Non-Accredited Investors Can Invest In the Following:

 

Regulation A:

  • These companies are generally trying to raise between $3 and $50 million
  • These offerings can be marketed

 

Regulation CF

  • Applies to crowdfunding
  • Can only be run through SEC-registered platforms

 

Whether you are an accredited or non-accredited angel investor, there are thousands of great investment opportunities out there waiting for someone like you. You don’t have to be a multi-millionaire or a CEO to become a successful angel investor, you just need a trusted partner to help show you the way.

Maybe your next investment is in an up-and-coming tech company or a revolutionary new fitness program. Regardless of where your investments take you, it is important to know how to be a successful angel investor and where to find the best investment opportunities. 

And remember… The Boardroom can be that guide. For a limited time, we’re reopening our membership for you.

 

 


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