There are several other pertinent restrictions related to this exemption, such as a prohibition on general solicitation and a cap on the number
of unaccredited investors allowed in an offering.
A bigger potential change for the industry is likely to be the entrance
of unaccredited investors into the market.
Not exact matches
Scammers cometh: Randy Shain, founder
of BackTrack Reports and investigative due diligence expert, predicts that with the SEC's decision to allow the solicitation
of capital from
unaccredited investors will come a new wave
of scammers.
The platform has funded 23 startups that have raised a total
of more than 2 million euros ($ 2.7 million) from over 15,000
unaccredited investors, according to Zandvliet.
That particular provision
of the legislation would allow businesses to give away pieces
of their company to
unaccredited investors in exchange for cash, or equity crowdfunding.
Because
unaccredited investors are likely less aware
of the risks associated with investing in startups, the potential for fraud and loss is that much greater.
In the Netherlands, equity crowdfunding from
unaccredited investors has been legal for the better part
of three years.
In March 2015, the Securities and Exchange Commission (SEC) released final Regulation A + rules under Title IV
of the JOBS Act, paving the way for companies like TTS Academy to raise capital from both accredited and
unaccredited investors.
In a stunning development earlier today, the SEC released the final Regulation A + equity crowdfunding rules under Title IV
of the JOBS Act that pre-empts state law, paving the way for $ 50M
unaccredited investor equity crowdfunding.
Somehow, we have concluded that
unaccredited investors should be able to likely lose their hard - earned money by investing in the most risky
of asset classes.
As such, most 506 (b) offerings are only sold to accredited
investors (even though the Rule allows for the sale
of up to 35 non-accredited
investors), as the sale to any
unaccredited investors requires significantly heightened disclosure to such
investors, which can be costly and burdensome to provide, and may increase the exposure
of an issuer to liability under federal and state securities acts.
Do a Regulation Crowdfunding offering for the
unaccredited investors and at the same time a Title II offering, which allows for general solicitation
of accredited
investors and does not have the $ 1 million cap.
It is an easier form
of raising money as it allows you to raise money from
unaccredited investors without the myriad legal issues that often arise with these
investors.
Investors, accredited or
unaccredited, in the United States or abroad, can become a part
of a blockchain company's story with investments as small as $ 20.
After all, I'm pretty sure federal regulations do not let
unaccredited investors just drop thousands
of dollars into random companies.
Fundrise offers both accredited and
unaccredited investors the ability to invest in either residential real estate through an eFund, commercial real estate through an eREIT, or diversified portfolio
of both.
We help you navigate and optimize for including the maximum number
of everyday people:
unaccredited, unsophisticated (those are both legal terms)
investors.
I'm the CEO
of Republic, an investment platform connecting tech startups and blockchain projects with global
investors — both accredited and
unaccredited.