By: Pat Gouhin, Chief Executive Officer

In late 2019, the Securities and Exchange Commission proposed amendments to the existing “Accredited Investor” definition to increase access to investment opportunities.  The additions include new categories to the definition that would allow for someone to qualify as an accredited investor based on professional certifications and designations, or other credentials issued by an accredited education institution.  The SEC is not proposing changing the thresholds for an accredited investor and those are expected to stay as is.  A 60-day public comment period was provided in which the Angel Capital Association submitted a response letter for further clarification and expansion of sections of the proposed updates. 

By: Pat Gouhin, Chief Executive Officer

The Angel Capital Association along with the Association of University Research Parks, International Business Innovation Association, SSTI, University Economic Development Association, Association of Public & Land-grant Universities, Center for American Entrepreneurship, National Venture Capital Association and Technology Councils of North America recently pledged their support for the Regional Innovation Program (RIS; now Build-to-Scale) within the Department of Commerce.  The RI Program encourages and supports the development of regional innovation strategies by funding flexible awards with a 1:1 match. This program received funding of $33 million in Fiscal Year 2020. 

By: Pat Gouhin, Chief Executive Officer

I just returned from another trip to Washington, DC where I teamed up with our tax coalition partners; National Venture Capital Association (NVCA) , Biotechnology Innovation Organization (BIO) and Advanced Medical Technology Association (AdvaMed).  We conducted a series of congressional visits with key representatives from the tax writing Senate Committee on Finance and House Committee on Ways and Means. We also met with the Assistant to the President for Financial Policy on the National Economic Council.  This coalition, started by ACA over four years ago by Public Policy Chairman David Verrill, brings a consistent voice to US tax policy that impacts investors and entrepreneurs. It is managed by ACA’s consultants at GrayRobinson.

By: William Carleton, Counselor @ Law, and volunteer chair of ACA Public Policy Advisory Council

Yes, there's Title III under the JOBS Act, promising equity crowdfunding (think Kickstarter or IndieGoGo, just not restricted to awards or products, but instead offering ownership in the company); yes, there's Reg A+, also bequeathed by the JOBS Act; and there are a plethora, now, of state crowdfunding laws that lower the bar to who may invest in private companies.

By: Marianne Hudson, ACA Executive Director

Last week, Scott Shane wrote a column in Entrepreneur.com, Would a Higher Accredited Investor Threshold Clip Angels’ Wings? While the answer to that question to me is obviously “yes”, Scott concluded “data on the angel capital market’s response to the 2010 increase in the (accredited investor) threshold doesn’t support that view.”

I’ve read his column and traded an email or two with him since, and I have to say, Pardon Me?

ACA today provided guidance on the significance of angel group membership in connection with new standards for accredited investor verification. Under Securities and Exchange Commission (SEC) Rule 506(c), which becomes effective September 23, 2013, startups and emerging companies that generally solicit for investors will have heightened duties to verify that all purchasers are accredited.*

Rule 506(c) represents a significant change in securities law, and uncertainty about the verification process is of concern to members of the Angel Capital Association and the active angel community at large. ACA has been vocal in our objections to the rule’s safe harbors that would require sharing wealth or income data, but it is important to recognize that they are not the full rule. The SEC provided a significant and flexible approach for complying with this rule using a principles-based methodology. ACA is providing its guidance on how membership in an Established Angel Group may meet the requirements for a startup that uses general solicitation to verify that all investors are accredited under the principles-based methodology specified in Rule 506(c).