> Wouldn't want too many poor people to get in early.
In reality loosening that restriction would lead to a reverse selection bias, where only extremely unfit companies would approach such investors. Talk to any startup and their preference of funding is ranked roughly this way:
1) Value-add VC
2) Non-value-add VC with big pockets
3) Value-add angel/superangel/seed fund
4) Non-value-add angel/superangel/seed fund
5) Randoms
By removing the gatekeepers we're back to that scene in "Wolf of Wall Street" where random brokers call up some widow in Nebraska to pitch her on some "high tech company about to go big" and forgetting to mention they're getting a 50% commission on this.
Meanwhile someone in the league of Google, Facebook or Uber would not go this route just because they already filled their rounds.
> And to pretend like people with less than a million dollars in liquid assets are "too dumb" or "inexperienced" to purchase something is beyond insulting.
This is less about treating the folks as "dumb" vs "bright" and more about access to proper financial professionals. Accredited investors typically have access to a financial advisor, investment consultant, attorney and a CPA whom they can ask to "look things over". The lower the total assets number, the higher are the chances that no financial advisor is ever involved.
In reality loosening that restriction would lead to a reverse selection bias, where only extremely unfit companies would approach such investors. Talk to any startup and their preference of funding is ranked roughly this way:
1) Value-add VC
2) Non-value-add VC with big pockets
3) Value-add angel/superangel/seed fund
4) Non-value-add angel/superangel/seed fund
5) Randoms
By removing the gatekeepers we're back to that scene in "Wolf of Wall Street" where random brokers call up some widow in Nebraska to pitch her on some "high tech company about to go big" and forgetting to mention they're getting a 50% commission on this.
Meanwhile someone in the league of Google, Facebook or Uber would not go this route just because they already filled their rounds.
> And to pretend like people with less than a million dollars in liquid assets are "too dumb" or "inexperienced" to purchase something is beyond insulting.
This is less about treating the folks as "dumb" vs "bright" and more about access to proper financial professionals. Accredited investors typically have access to a financial advisor, investment consultant, attorney and a CPA whom they can ask to "look things over". The lower the total assets number, the higher are the chances that no financial advisor is ever involved.