It's not. It serves as a counterbalance to much lighter reporting/auditing requirements for private vs. public companies.
It's way easier for a private company to do some creative accounting and do away with your money without committing a criminally punishable offence. The idea is that if you have $1M in assets, you can tolerate that risk (or do your own due diligence), but if your entire life savings is something like $50K, don't give them to that sleazy guy on the phone that isn't independently audited or banned from pump-and-dumping his own stock.
In Germany the limit is 1000€ on a single investment for investors who do not disclose their financial status. 10000€ for those who can prove they have more than 100000€ in cash and beyond that you are at most allowed to invest twice your monthly income up to 25000€.
This is for crowdinvesting only but this convertible note campaign is very similar to crowdinvesting campaigns in Germany. Although it is possible for companies to let investors invest directly, usually there is a licensed financial advisor running the crowdinvesting platform that handles payments by delegating them to a licensed payment service provider. The financial advisor is also supposed to screen investments and make sure the investor understands what form of investment he is making and how much risk he is taking on.
If you want to get past these limits you wouldn't go through a crowdinvesting campaign.
That's like ... your opinion. It isn't the government's responsibility to make sure there isn't lead in the food you eat, but we have the FDA. Ditto usury laws, medicine laws etc.
where's the word "accredited"? and I said "from taking risks", so where does it say that? words matter, as you are trying to indicate.
Accredited investors are allowed to take risks without the level of oversight that "naive" investors are given. Selective quoting does not change that.
My biggest gripe with it is that it's gatekeeping based on net worth. There should be a mechanism to become an accredited investor with any income/wealth level if you pass a financial knowledge exam.
Yeah, those can be gamed, but if someone is willing to cheat on a test in order to remove their legal protections and access risky investments, well, good luck to them.
