September 16, 2019
Hello SEC, I am writing to urge an expeditious change to the definition of an “accredited investor.” Currently, a person with no context, knowledge or familiarity with angel investing, startups or Silicon Valley can invest in startups, syndicates or venture funds as long as they are “wealthy” as defined by the SEC ($200k income or $1M non-residential assets). Meanwhile, a knowledgeable person who works with startups, venture capital and Silicon Valley who doesn’t have wealth is barred from investing even though he or she would have significantly more understanding of the risks and potential. I would encourage that the “accredited investor” criteria be waived for anyone who actively works with the startup ecosystem and signs an acknowledgment of the risks. Furthermore, anyone who lacks wealth should not be prevented from leading and investing a angel syndicate. My understanding is the current rules allow someone to lead a syndicate but can’t invest in his or her own syndicate, even if a small amount (ie $1,000). That makes no sense. A sophisticated investor should be based upon their knowledge, not size of bank account. Anyone who works primarily with startups, accelerators and venture capital, is a partner or manager in a fund should automatically be considered an accredited investor. What needs to happen to fix these flaws with the accredited investor definition in the most expedient manner? Thank you, Brian Davis