12/30/2019
Subject: New Accreditation Rules for Investors
I like the new regulations and would like to consider adding another option, based on income and net worth:
For true Angel Investments, I would like to see a junior level accredited investor. Maybe someone who makes $100,000 per year or has $500,000 in net worth. They would be allowed to invest in deals through an established Angel Group that provides education and possibly also a more experienced mentor. This would be a huge opportunity to bring in many new investors, who are diverse when it comes to race, age, gender, experience, etc. It also provides portfolio companies with more valuable real-world customer, user, and leadership advice that is more relevant for many early stage tech and other innovative business models. It will also encourage newly junior level accredited investors to continue investing over a period of time and at an increasing level, as they spire to reach accredited and qualified levels.
This would be an amazing way to solve the difficult diversity issues we have in Angel Investing and it provides them an opportunity for growth and participation as they progress with their financial situation. Plus, this population is large and could bring a large level of capital in aggregate to early stage investing.
We may want to consider investment limits at this lower level of accreditation, but it allows them to be at the table.
The other changes are good, too, but tend to be more useful for VC stage investors.
Warm regards,
Timothy S. Parker
President, Michigan Capital Network
Grand Angels, Woodward Angels, Ka-Zoo Angels, Flint Angels
MCN Venture Funds 1, 2 & 3
Board Member, Center for American Entrepreneurism
40 Pearl Street NW, Suite 336
Grand Rapids, MI 49503