Non-Accredited Investor

Non-Accredited Investor

An investor with a net worth of less than $1 million who has had an annual income of less than $200,000 ($300,000 with a spouse) in each of the past two years. Under Regulation D, no more than 35 non-accredited investors are allowed to participate in the private placement of a security, company, or hedge fund. As a result, many investment vehicles target high net-worth individuals.
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Instrument 45-536) and the existing shareholder exemption (CSA notice 45-313) which allows for an investment of up to $15,000 (from a non-accredited investor) within any 12-month period.
(207) If an issuer receives more than $5,000 from a non-accredited investor, it will not be in compliance with the Act, ineligible for the exemption, and in violation of the securities registration requirements under North Carolina law.
Under Rules 505 and 506, the issuer can sell its securities to an unlimited number of "accredited investors" and up to 35 non-accredited investors. There are specific information requirements (including audited financial statements) that apply if an issuer sells its securities to a non-accredited investor under Rules 505 or 506, and all non-accredited investors in a Rule 506 offering must either be financially sophisticated or be represented by a qualified purchaser representative.
As a result, Reg A+ preempted all state registration and qualification requirements for Tier-2 securities either purchased by an "accredited investor" or purchased by anyone else so long as the non-accredited investor refrained from purchasing securities valued at more than 10% of their net worth or annual income.
Advisors can expect to have more conversations in the near future with their non-accredited investor clients about the merits of specific startup small business investment offerings and venture investment in general.
Very often, Rule 506 offerings are limited to accredited investors for the practical reason that SEC roles require very detailed and precise written offering materials if even one non-accredited investor is among the purchasers.
The purpose of the series is to better educate issuers and the non-accredited investor community on the topic of equity crowdfunding, financial technology, and bridging the gap to access capital to spur economic growth and development.
Global Banking News-August 28, 2019-GROUNDFLOOR to open capital markets to non-accredited investors with launch of split loans
BANKING AND CREDIT NEWS-August 28, 2019-GROUNDFLOOR to open capital markets to non-accredited investors with launch of split loans
M2 EQUITYBITES-August 28, 2019-GROUNDFLOOR to open capital markets to non-accredited investors with launch of split loans
Non-accredited investors may also invest, under Regulation A+, in occasional investment opportunities.
The Wefunder platform allows small, non-accredited investors to bet on companies.

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