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The accredited investor rules irk me. Not because investing in startups is a good way to accumulate wealth, but because of the double standard. The government h

The accredited investor rules irk me. Not because investing in startups is a good way to accumulate wealth, but because of the double standard. The government happily separates literally tens of billions of dollars from poor people every year through the lottery, why can't we let those people crowdfund interesting new ideas if they want to?

ajmurmann 5y ago
Fortunately, you can now also become an accredited investor by taking a class rather than meeting income or wealth requirements.
- iammisc 5y ago
  This is the right approach IMO.
- jb775 5y ago
  Do you have any info on where to take this class?
  - ajmurmann 5y ago
    Unfortunately, I don't. Here is more about it though: https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated-3 https://www.investor.gov/introduction-investing/general-reso... I also have seen that some Angel Investment firms will pay cost of accreditation from your fees to them.
Retric 5y ago
Due to the long history of investment scams. The lottery takes large sums in aggregate, but doesn’t use high pressure sales tactics or let people easily place their life savings in it. Aka, it would take significant effort to buy 500,000$ worth of lottery tickets.
jdavis703 5y ago
The lottery gives players a moment to fantasize about what it’d be like to be rich. I see no difference to buying a beer for a few moments of entertainment. Obviously people can overdo gambling, but the same goes for beer.
throwaway803453 5y ago
There is a secondary benefit in that it influenced people like me to save, invest, and work very very hard to get that status. I invested in one YC startup after achieving it and that felt like a major personal win. However, the financial goal posts were set 20+ years ago should have been periodically updated for inflation.
mywittyname 5y ago
Blame scam artists. Before these rules were in place, scammers were taking people's life savings through shoddy investments. This happened often enough that people asked the government to step in to protect these people. And the "Accredited Investor" was born. Maybe things would be better today if they revoked the rules. Or maybe they would be worse. But either way it exists for a reason. And to be honest, $1MM is not a huge hurdle to overcome. Anyone looking to invest in risky ventures would be wise to accumulate a meaningful amount of wealth in order to shield them from the loss of capital they will very likely incur. Plus, there are ways around this in certain situations. A better approach would be to address the reporting requirements that are preventing startups from going public earlier. Startups used to IPO a few years after founding, but now they are going for 10+years.
nceqs3 5y ago
Look at the SPAC boom. Letting retail in creates many problems. There are too many scam artists in the world.
manicennui 5y ago
Thanks to Regulation Crowdfunding, people can. Sites like Wefunder make it easy to do so.

ajmurmann 5y ago

Fortunately, you can now also become an accredited investor by taking a class rather than meeting income or wealth requirements.

iammisc 5y ago
This is the right approach IMO.
jb775 5y ago
Do you have any info on where to take this class?
- ajmurmann 5y ago
  Unfortunately, I don't. Here is more about it though: https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated-3 https://www.investor.gov/introduction-investing/general-reso... I also have seen that some Angel Investment firms will pay cost of accreditation from your fees to them.

Retric 5y ago

Due to the long history of investment scams. The lottery takes large sums in aggregate, but doesn’t use high pressure sales tactics or let people easily place their life savings in it. Aka, it would take significant effort to buy 500,000$ worth of lottery tickets.

jdavis703 5y ago

The lottery gives players a moment to fantasize about what it’d be like to be rich. I see no difference to buying a beer for a few moments of entertainment. Obviously people can overdo gambling, but the same goes for beer.

throwaway803453 5y ago

There is a secondary benefit in that it influenced people like me to save, invest, and work very very hard to get that status. I invested in one YC startup after achieving it and that felt like a major personal win. However, the financial goal posts were set 20+ years ago should have been periodically updated for inflation.

mywittyname 5y ago

Blame scam artists. Before these rules were in place, scammers were taking people's life savings through shoddy investments. This happened often enough that people asked the government to step in to protect these people. And the "Accredited Investor" was born. Maybe things would be better today if they revoked the rules. Or maybe they would be worse. But either way it exists for a reason. And to be honest, $1MM is not a huge hurdle to overcome. Anyone looking to invest in risky ventures would be wise to accumulate a meaningful amount of wealth in order to shield them from the loss of capital they will very likely incur. Plus, there are ways around this in certain situations. A better approach would be to address the reporting requirements that are preventing startups from going public earlier. Startups used to IPO a few years after founding, but now they are going for 10+years.

nceqs3 5y ago

Look at the SPAC boom. Letting retail in creates many problems. There are too many scam artists in the world.

manicennui 5y ago

Thanks to Regulation Crowdfunding, people can. Sites like Wefunder make it easy to do so.