For anyone who has tried to raise early stage venture capital, they’ve come across the concept of an “accredited investor.” In my oversimplification of the concept, it’s often a classification based on how much an individual or household earns that is used as an indicator that they are probably knowledgeable enough about financial things to invest in high risk endeavors like startups. There’s only one problem: The definition is pretty restrictive. Okay two problems: Net worth isn’t necessarily an indicator that you understand startup investing. That’s why there have been any number of efforts to expand the definition to allow more folks to invest in early stage startups.
One current effort is being championed by Engine, an advocacy group for startups at the national and regional level.
Policymakers in the House Financial Services Committee are gearing up to consider proposals to improve capital access for startups. Expanding the accredited investor definition would allow greater participation in the startup ecosystem, giving more people the opportunity to invest in startups, resulting in more startups receiving funding. Join startups, investors, and members of the innovation ecosystem calling on Congress to expand the definition of accredited investor.
If this is of interest to you, they have a draft letter they would like to submit to Congress. With your signature.
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