Investor Thresholds

INCREASINGINVESTOR THRESHOLDS THE WRONG STEP2 As equity crowdfunding inches closer to becoming an active reality, the SEC is mulling over a change in investor thresholds that could potentially devastate the investment landscape in the US. WHY HAVE THRESHOLDS? Thresholds determine who is and isn't an accredited investor. Accredited investors generally have the sophistication and knowledge to avoid fraudulent investment opportunities. CURRENT Vs. PROPOSED INVESTOR THRESHOLDS $2,500,000 CURRENT $2.3M PROPOSED $2,000,000 $1,500,000 $1M $1,000,000 $700k $500k $500,000 $500k $200k Individual Income Income Threshold Net Worth Threshold Threshold With Spouse THE EFFECT There are 8.7 million investors that qualify as accredited under the current thresholds. If the proposed •.• thresholds get 0, $1.3 Was invested into private TRILLION equity in 2010. approved, that number will be reduced to just 3.7 million. This is a The estimated 6,$546 decrease of amount that will 142% be invested = 100,000 INVESTORS BILLION with new thresholds.* PUBLIC BACKLASH Seedlnvest, an equity crowdfunding portal, is leading the charge against the hike in investor thresholds. The following are some excerpts from their social media following. e Seedinvest @seedinvest_co · Jul 21 Allan Tear from @betaspring wants to #saveangelinvesting, do you? seedinve.st/1qjTcJ7 @Thunderclaplt #SAVEANGELINVESTING "WE LET THE AVERAGE AMERICAN RISK AS MUCH MONEY AS THEY WANT IN CASINOS AND LOTTERIES WITHOUT MEANS TESTS OR EDUCATION. YET YOU ARE SPENDING TIME ON ENDANGERING THE SINGLE MOST IMPORTANT SOURCE OF STARTUP CAPITAL IN THE US. PLEASE REFRAIN." ALLAN TEAR powered by seedinhvest Managing Partner, Betaspring Charter Member of the Startup America accelerator network Angel, Cherrystone Angel Group A Followed by Jeff SKI Kinsey and 20 others Rich Rodman @RodmanRich · 6m I have an idea. Let's raise the investor thresholds and limit the flow of capital in the US even more... #sarcasm #saveangelinvesting Joe Wallin @joewallin · Jul 12 Seedlnvest Launches #SaveAngellnvesting Campaign - nzzl.me/W7KIFG via @Nuzzel O View summary 6 Reply t3 Retweet* Favorite More Michael Keating @mbkeating · Jul 10 #SaveAngellnvesting - New Regulations Could Cut Startup Angel Investors by over 50% -Voice your Opposition Now: thndr.it/1oh8IZb 9 Followed by CrowdFundingTIPS and 3 others Stefano D'Aniello @DonZacca · Jul 12 Well put, @kiran_lingam: $200K has never been and will never be a good proxy for smart @SeedInvest buff.ly/1m1ISCP Retweeted by Oscar A Jofre Jr. Andrew Dix @AndrewRDix · Jul 10 Increasing Accredited Investor thresholds would be a disaster for the economy crowdfundinsider.com/2014/07/43755-.. #EquityCrowdfunding O View summary 6 Reply t3 Retweet * Favorite More crow/dentials The leading compliance solution for all crowdfunding platforms. * This estimate is derived directly from the decrease in the number of investors through the proposed increase of investor thresholds. http://www.sec.gov/divisions/riskfin/whitepapers/dera-unregistered-offerings-reg-d.pdf http://www.sec.gov/info/smallbus/acsec/acsec103111_analysis-reg-d-offering.pdf