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You can take on unqualified investors. This happens all the time with family, friends, etc. The problem is when you're publicly seeking investors. If you're
by ssharp 18y ago
You can take on unqualified investors. This happens all the time with family, friends, etc. The problem is when you're publicly seeking investors. If you're doing that, they must be high-net worth investors.
- tptacek 18y agoTalk to a lawyer; don't act on YC comments. For instance, Google for Brad Feld explaining that nonaccredited investors (including friends and family) can rescind their investments at any time. Brad also comments on large companies having issues with holdings by nonaccredited investors. I have direct experience with this: I executed options in a startup in the mid-90s and was able to negotiate a significant premium on my stock holding when the startup's acquirer refused to allow nonaccredited stockholders. This just seems like something not to fuck around with.