Started 2 petitions
Update the accredited definition to reflect investor sophistication
We believe that updating the "accredited investor" definition laid out in Regulation D is critical to not only providing early-stage companies with easier access to capital, but also to democratizing access to alternative asset classes. We have written a letter to the U.S. Securities and Exchange Commission (SEC), asking them to update the definition for the first time since its inception in 1982. Read the letter in its entirety or see the highlights below: The definition today: An accredited investor, when it comes to individuals investing on their own behalf, includes anyone who: Earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR Has a net worth over $1 million, either alone or together with a spouse (excluding the value of their primary residence). What are some of the biggest problems with the current definition? Assumes that wealth, to the exclusion of financial knowledge, solely determines whether or not people are sophisticated enough to understand private investments. Exacerbates America's growing regional wealth disparity by disregarding geographic wealth discrepancies across the US ($199,000 a year goes much further in Jackson, MS than it does in San Francisco, CA), and consequently obstructing access to potential avenues of wealth creation for many living areas of the country with lower average income. Leads to a shortage of capital for early-stage company founders reliant on Regulation D, but who might otherwise benefit from fundraising from their non-accredited user bases. In turn, fewer companies are developing life-changing technologies and creating jobs. Does not reflect the technological advances that have occurred since its inception, namely the broad adoption of the Internet. Access to information makes it easier for investors to perform due diligence on investment opportunities. Potential solutions: Supplement the current blanket financial threshold with an additional test to demonstrate an understanding of investment risks. Include a person’s experience, knowledge and credentials (e.g. an advanced degree, professional qualifications, or Securities Licenses) as a measure of sophistication. As long as both Main Street investors and early-stage entrepreneurs remain shut out the majority of the VC ecosystem, they'll never catch up. Sign our petition to tell the SEC that you want these outdated regulations updated to help level the playing field.
Raise the Regulation Crowdfunding limit to $20M
We believe that increasing the equity crowdfunding cap outlined in the JOBS Act exemption for Regulation Crowdfunding (Reg CF) will invite more retail investors into a systematic, transparent part of the private capital markets that is creating jobs and providing valuable economic stimulus. We have written a letter to Securities and Exchange Commission (SEC) Chairman, Hon. Jay Clayton, asking him to work to raise the limit from US $1M to US $20M. Read the letter in its entirety or see the highlights below: There has been zero fraud, competent issuers have been able to raise serious capital from investors that believe in their products or services, and retail investors (for the first time in recent history) have a transparent, systematic way to back companies they believe in. Successfully funded companies are supporting and creating valuable jobs and providing substantial economic activity in a broad range of locally important industries all around the United States. The initial cap of US $1M was meant to be adjusted. Only once since the launch of Regulation Crowdfunding has this been adjusted and at the time only by $70,000. Such de minimus adjustments do not fully allow meritorious issuers to fully benefit from this new form of online finance nor expand the opportunity for issuers seeking to raise in excess of $1M. The current $1M level is now far below what startups and SMEs need for seed stage capital. May 2018 data indicates that the median sized funding round for Angel or Seed stage companies in the US is $2M. This means that even for the smallest funding round the current limits do not allow an issuer to raise their entire round via Regulation Crowdfunding. This dramatically increases costs and time spent on raising capital by US businesses. This reduces the number of American innovators and job creators in the United States.