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One issue is even with accredited investors is the so-called 99 investor problem for pooled investment vehicles. If I’m a company I don’t want thousands of ind
by rdlecler1 9y ago
One issue is even with accredited investors is the so-called 99 investor problem for pooled investment vehicles. If I’m a company I don’t want thousands of individual shareholders on my captable. The answer would be that we could have crowdfunded VC funds that invests. But because the SEC limits pooled investment vehicles to 99 accredited investors you limit the number of $1k-$100k checks you can take in, which then limits how big a crowdfunded VC could be.
- MR4D 9y agoQualified Purchasers ($5MM+) are limited to 500, thereby minimizing this problem considerably. There are other ways around this that are surprisingly obvious to those who work in the industry (but virtually unknown to outsiders)