At Fund Wisdom we believe innovative wealth building investments should be accessed by all, as we look to empower the democratization of private equity. Overarching returns for alternative-assets like private equity have outperformed the stock market through the greater risk profile. We showcase investment opportunities in early stage companies to produce higher returns, lower fees, and reduced risk.
In the United States one must be wealthy in order to invest in most startup offerings. This is where the term private, in private equity comes from. The measure of wealth is defined by the Securities and Exchange Commission (SEC) as a net worth of $1 million excluding a primary residence or $200,000 annual income if single, $300,000 if married, for the past 2 years. If you hit one of the thresholds you would qualify as an accredited investor which more detail can be found in our Investor Type section.
Several regulatory and market changes have allowed for greater access to these historically private offerings. Non-accredited investors have the capability to capitalize on access to private equity as alternative assets become increasingly democratized. The laws that have been passed were drafted with access in mind, but have been implemented with too many restrictive limitations. Major market innovations like blockchain and the coins from those networks have filled the gap through cryptocurrencies.
Venture Investing for All
The Jumpstart Our Business Start-ups (JOBS) Act’s Title III and IV requirements enable non-accredited investors to purchase shares in private companies through equity funding portals. Non-accredited offerings must adhere to SEC legislation including Regulation D which restricts private securities deals. Deals are limited to comprise under 35 non-accredited investors, yet there exists no limitation regarding the amount of accredited investors and capital limitations.
SEC regulation exhibits that if non-accredited investors receive an annual income/net worth less than $100,000, they retain the ability to invest over $2,000 or 5% of lesser their annual income/net worth. Yet if investors receive over $100,000, they have the opportunity to invest 10% of lesser of their annual income/net worth.
It’s clear the barriers to entry are decreasing providing access to less-affluent individual investors. An assortment of online platforms have been developed to attract investors that cannot hit the requisites for accreditation. These platforms provide, end-to-end, digital solutions offering an array of alternative investments across the liquidity sphere and leverages relationships with sophisticated institutions such as sovereign wealth funds, pension funds, insurance companies, and endowments. They also offer investors exposure to private funds lowering minimum investments. These platforms can help to seamlessly incorporate within client portfolios and qualified registered investment advisors to collate smaller pools of money.
Financial technology's proliferation is contributing to the extinction of inefficient marketing practices, excessive distribution pricing, and archaic information delivery. Non-accredited investors can efficiently and cost-effectively access curated, leading-edge alternative investment liquidity. It’s evident there exists a variety of online platforms and at Fund Wisdom we’re looking to help you capitalize on the paradigm shift.