I have some money that I would like to invest. I have some money invested in the stock market and I have found some other places I'd like to invest as well, but it seems that many places require that you be an accredited investor.
I've looked up the qualifications for being an accredited investor and found the following:
The federal securities laws define the term accredited investor in Rule 501 of Regulation D as:
- a bank, insurance company, registered investment company, business development company, or small business investment company;
- an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;
- a charitable organization, corporation, or partnership with assets exceeding $5 million;
- a director, executive officer, or general partner of the company selling the securities;
- a business in which all the equity owners are accredited investors;
- a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person;
- a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or
- a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes. Source
Though I make an all right amount of money, I do not make enough to qualify under option 7, nor do I qualify under any of the other options.
Is there any way for someone who does not qualify for any of those options to still invest?
Create a registered investment company, provide the company with funds, and invest via it?
The SEC has recently voted to allow non-accredited investors to invest a portion of their income into start-ups (Source). It's not finalized yet, but it is definitely something to keep an eye on:
Investors, over the course of a 12-month period, would be permitted to invest up to:
$2,000 or 5 percent of their annual income or net worth, whichever is greater, if both their annual income and net worth are less than $100,000.
10 percent of their annual income or net worth, whichever is greater, if either their annual income or net worth is equal to or more than $100,000. During the 12-month period, these investors would not be able to purchase more than $100,000 of securities through crowdfunding.