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Opinions vary. It is a flaw for those banned from being recognized as "accredited investors". It is a feature for those lucky to have competition banned.

• jakelazaroff 9y ago
  Can you be banned from being an accredited investor? AFAIK, the only requirement in the US is that you have a net worth of $1m or an income of $200k a year. It's not perfect, but it's the government's best way of determining whether you have the ability to suffer significant financial losses.
  • devereaux 9y ago
    Again, there are 2 equally valid explanations. One is to say that the government want to protect people against themselves, to make sure they can withstand significant financial losses. Another explanation is that those who match these conditions (I'd guess about 2% of the population) have successfully lobbied the government to maintain their advantage against the remaining 98%. I do not understand why people downvote when I just say out loud the less palatable alternatives views. It seems to me we are not considering all the possibilities there.
    • jakelazaroff 9y ago
      Their advantage isn't that other people aren't allowed to make certain types of investments, though. It's simply that they have more money. Even if "accredited investor" weren't a thing, they'd still have access to better investment opportunities, because they can offer better terms. Compared to someone who has 1000x more money than you, all you can offer is the willingness to take on more risk — which is exactly what accredited investor rules are meant to protect people against.