To: President Donald Trump, The United States House of Representatives, and The United States Senate
Tell Congress that ALL Americans should be allowed to invest in startups
Tell the SEC to remove the accredited investor requirement. The right to invest should be just that, and not a privilege available only to the wealthy.
In an environment where many Americans already feel like the deck is stacked against them, where wealth begets special privileges, where markets and the government rules that control them seem less and less egalitarian; this rule only exacerbates the sentiment.
Why is this important?
Currently, the SEC only allows wealthy individuals and families to invest in startups. They are relying on a definition of who is considered an 'accredited' investor that only looks at income or wealth. This definition is effectively restricting more than 95% of Americans from investing in startups.
To give you a sample of the new investment opportunities that are out of reach to most of us today, I've compiled a short list below. Unfortunately, these investments are only accessible to folks that either have $1 Million in net worth (EXCLUDING YOUR HOME!) or 3 years of income exceeding $300,000 - those that fall within the top 5%.
* Fundrise (www.fundrise.com) - A platform for investing in real estate projects from reputable companies.
* EnergyFunders (www.energyfunders.com) - A platform for investing in oil and gas projects.
* LendingClub (www.lendingclub.com) - A platform for investing in peer-to-peer loans.
The above three examples show how technology is changing the way in which traditional finance operates and is opening up many industries to more investors. Unfortunately, the SEC is working with outdated rules and arbitrary definitions that exclude most Americans from participating in these investment opportunities.
Every American, regardless of income or wealth, should have access to the same investment opportunities. The idea that how much money someone has or makes determines what investments are allowed is offensive. The investment market should not be an exclusive country club, and access should be open to all.
It is time to tell Congress that Americans should NOT be excluded from making investments based solely on how much money they have or make.
To learn more about the accredited investor rules see links below:
Great summary by Elizabeth Scharpf - http://bit.ly/1QQyJgv
My own comments - http://bit.ly/1ImqEeU
Link to Federal Rule: http://bit.ly/1QQyDoR