While exempt offerings now involve twice as much money as public offerings, only accredited investors (“AIs”) get invited to the private company party. Thus, individuals who fail to meet the net worth or income thresholds (“non-AIs”) cannot invest early in high-growth ventures and therefore miss out on a lot of investments and upside. Moreover, because non-AIs make up 87 percent of U.S. households, new and other privately held businesses are not raising capital from a vast majority of society’s individuals. To these people and firms, well-intentioned rules are keeping the capital out of capitalism.
Expanding the AI definition would increase … Read more