Author: OurCrowd

By OURCROWD The decision by the US Securities and Exchange Commission (SEC) to expand its definition of an “accredited investor” paves the way for thousands more aspiring venture capitalists and angel investors to benefit from investing in the private markets. The new rules, which took effect Dec. 8, 2020, will further democratize the ability to invest in startups before they go public, allowing more investors to enjoy the often outsize pre-IPO returns accessible until now only to institutions and high net worth individuals. Before the changes, “accredited investors” were defined as the following: Individuals with more than $1 million in net worth (excluding the value of any primary residence) or who have earned more than $200,000 per year (or $300,000 with a spouse) in each of the last two years.Related parties to the issuer of securities, including its executive officers and directors.Certain specified organizations with more than $5 million in assets.Institutional investors such as banks, and other entities which meet certain legal criteria. The following are now added to the definition of “accredited investors”: A person who holds in...