

Startups Can Generally Solicit Starting September 23 - acremades
https://rockthepost.com/blog/general-solicitation-takes-effect-september-23/

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brainflake
In my mind, it's the whole requirement of being an "accredited investor" that
is the real hurdle. I ran into this a few years ago when a friend of mine
opened a brewery. He was taking investments, but since it was a private
company you had to be an accredited investor (which I wasn't). In the end I
ended up being able to give him some money for potential returns but we had to
jump through some legal loopholes.

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ARothfusz
It was the best of times, it was the worst of times ...
[http://shoeshinestocktips.com](http://shoeshinestocktips.com)

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hanley
This might be a dumb question, but why does the law require that an investor
is "accredited"? Why does their income and net worth matter? If someone only
made a measly $100k last year and wants to invest in my company, why wouldn't
they be allowed to?

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fecak
I believe it's to prevent lower net worth individuals from losing their life
savings. The inability to make a big bet on a single company. Paternalism
basically.

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pawrvx
"permits an issuer to engage in general solicitation or general advertising in
offering and selling securities pursuant to Rule 506, provided that all
purchasers of the securities are accredited investors" This is huge.

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newsign
So how far are we from real crowd-funding? i mean no requirement of accredited
investors? i'm sure someone is already working on that bill ...

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tlrobinson
From TFA: "When Title III of the JOBS Act takes effect – likely in 2014 – this
number will multiply as any individual will be able to invest in private
offerings."

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irtefa
It will be interesting to see what kind of investment platforms (like
kickstarter) this will create.

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pawrvx
printmoney.federalreserve.gov

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jpdoctor
I'm trying to figure out the barrier-to-entry for scam artists, and they seem
pretty low.

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dllthomas
Your marks have to be filthy rich. That's about it, though.

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sbw
Provided solicitations are limited to accredited investors...

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nickodell
What's an accredited investor?

edit: Nevermind, it's a person with at least $1,000,000 in assets or $200,000
dollars in income.

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mindcrime
And the problem with the "new rules" is that they require the "accredited
investor" to provide all sorts of documentation to the startup, to certify
that they are, indeed, an "accredited investor". We're talking tax returns, or
a certified document from their accountant, etc.

This is going to add extra friction to the process and may negate a lot of the
purported benefits of this whole mechanism, given that investors were
previously allowed to simply "self certify" their status as an "accredited
investor".

See, for example, [http://wraltechwire.com/will-sec-rule-506-c-changes-help-
cur...](http://wraltechwire.com/will-sec-rule-506-c-changes-help-cure-your-
capital-needs/12693425/)

for some discussion on that point.

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segmondy
can't they do that by proxy? i go to my bank, i show them evidence that i have
made $200k or more in the last 2 years, or that i have a million+ net worth. i
get the document notarized, i give the company the notarized document by the
bank as evidence. my paperwork stays private.

