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November 21, 2019

Why Can I Invest in Startups?

As you likely know if you have found your way to the KingsCrowd website, you have the freedom to invest in your favorite startups. You might be wondering why this is. It wasn’t too long ago that there were more restrictions on crowdfunding.

 

For this you can thank Title III of the JOBS Act. The JOBS Act was passed by Congress and signed into law in 2012 by President Obama. Put simply, it allows for nonaccredited investors to put money into private companies. 

 

Prior to this law, only accredited investors had these privileges. An accredited investor is someone who meets one or more special requirements, having a net worth exceeding $1M or annual income over $200k for the past two years, for example. According to the SEC, this is about 10% of American households, though other sources report the number to be far less.

The JOBS Act opened up investing in private companies to those that don’t meet the above criteria, or are unaccredited investors. At KingsCrowd, we cover deal flow for both accredited and unaccredited investors, so no matter who you are, you can make the most of your money.


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About: Olivia strobl

Olivia is a graduate of Wellesley College with a Bachelor's in Neuroscience and English. She has spent time as an investment intern at Glasswing Ventures, an AI-focused VC fund in Boston where she helped develop machine learning algorithms for identifying early signal success factors of startups.

View Olivia strobl's articles

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