You can take on an unlimited
number of accredited investors and with this type of offering you are limited to 35 non-accredited investors.
Using
the number of accredited investors in the US as a proxy, that is only 12 million people in a nation of 300M + who could participate in «fintech IPOS» and the financial background of these people is much closer to 1 % status.
Implementation of Title II of the JOBS Act, which lifts the ban on general solicitation and advertising of security offerings, will kickstart this new funding mechanism, allowing companies to efficiently solicit and raise capital from a large (or small)
number of accredited investors online.
Simultaneously, it was also able to avail itself of the broad benefits of the Rule 506 exemption, including the ability to raise an unlimited amount of money from an unlimited
number of accredited investors, blue sky preemption and «relaxed» disclosure standards, as sales were only made to accredited investors (that said, the company did provide fulsome disclosure materials to prospective investors).
Rule 506 (b) allows for issuer's to raise an unlimited amount of money, from an unlimited
number of accredited investors, so long as no «general solicitation» is conducted in connection with the offering, and that each investor has a substantive, pre-existing relationship with the issuer or person offering the securities of its behalf.
Not exact matches
Bitwise, which offers
accredited investors access to a
number of passive - crypto funds, has started to put out research.
Regardless
of whether securities in the offering have been or may be sold to persons who do not qualify as
accredited investors, enter the total
number of investors who already have invested in the offering:
Select if securities in the offering have been or may be sold to persons who do not qualify as
accredited investors, and enter the
number of such non-
accredited investors who already have invested in the offering.
Companies raising «traditional» Reg D private placements accessible only to
accredited investors, for example, had grown accustomed to pooling individual
investors into single - purpose LLCs to manage their cap tables and limit the
number of direct
investors reflected therein.
This
number, however, represents less than 1 %
of the total amount raised under the traditional Rule 506 (b)
accredited investor exemption that does not allow advertising.
Potential changes to securities laws could decrease the
number of households qualifying as
accredited investors from approximately 8.5 million to...
The most recent
numbers I have — there are 8.6 Million
accredited investors in the U.S., and only 3 per cent
of them are investing in small businesses (which translates roughly to 0.1 per cent
of a population).
There are
number of alternatives that are discussed in [the SEC staff study on
accredited investors] that are being considered as, again, proxies for sophistication and being able to fend for yourself depending on your background, your professional qualifications, how much you have been involved in investing.»
This will open up angel investing to an entirely new breed
of accredited investors, including those who are seeking diversification from public markets and who do not have the time / expertise to professionally diligence and invest in the
number of companies necessary to achieve diversification themselves.
Accredited investor: An
investor in an offering who meets certain criteria under Regulation D, who does not have to be counted for purposes
of limitations on the
number of purchasers in an offering.
An infographic featured in a post by Entrepreneur shows that there are approximately 258,000 active
accredited investors but when non-
accredited investors (anyone over the age
of 18) are allowed to participate in online investing that
number could jump to 233.7 million!
No one ever seems to mention the good news, which is that you can freely advertise and solicit an unlimited amount
of money from an unlimited
number of verified
accredited investors.