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Not trying to throw Chris under the bus here but if his stated net worth is <$1million when he started, was he not in violation of the definition of "accredited
by newman314 16y ago
Not trying to throw Chris under the bus here but if his stated net worth is <$1million when he started, was he not in violation of the definition of "accredited investor" per Wikipedia?
- gojomo 16y agoNot if his income was over $200K in the prior 2 years, and expected to be the same in the current year. The income level is an alternate, not additional, qualification. And, perhaps he fudged some numbers, by inflating the value of something illiquid, to claim to be accredited slightly before he was. As I understand it -- but could be wrong, IANAL -- this requirement isn't a matter of providing formal documentation to the government beforehand, but of asserting your status to the security issuer, perhaps with some documentation, and them accepting your assertion. Only if things go south, and disputes/lawsuits begin, would the fact that money was accepted from non-accredited investors begin to cause liability and enforcement troubles for the issuers. So the issuers are motivated to ask for some documentation, but could also easily 'look the other way' or accept flimsy assertions in some instances.
- newman314 16y agoCan anyone comment if documentation is typically required (by the lawyers or startup) from an angel investor or is this assumed (scary)?