Explaining the SEC’s New Accredited Investor Guidelines with Kim Lisa Taylor, Esq
- Author
- Kent Ritter
- Published
- Wed 09 Sep 2020
- Episode Link
- None
The SEC recently adopted amendments to the “accredited investor” definition, one of the principal tests for determining who is eligible to participate in private capital markets, and today’s guest, Kim Lisa Taylor, is just the person to explain them. Kim is a nationally recognized corporate securities attorney, speaker, and author of the number one Amazon bestselling book, How to Legally Raise Private Money. She’s is also the founder of Syndication Attorneys, PLLC, and investormarketingmaterials.com. Its purpose is to provide quality legal advice, offering documents and professionally designed marketing materials for clients nationwide. Kim has been a responsible attorney for hundreds of security offerings and she routinely teaches subjects related to legally raising private money in front of groups, ranging between 50-1000 plus attendees. In this episode, Kim explains the SEC’s new accredited investor guidelines, who is eligible, and what the requirements are, so make sure to tune in today!
Key Points From This Episode:
- Kim explains the definitions of an accredited investor and how the definitions for retail investors specifically have changed.
- Very few people that have certain securities licenses have been excluded, says Kim.
- Other categories that pertain to retail investors – knowledgable employee of a private fund, and spousal equivalent.
- Spousal equivalent is an attempt to make it more inclusive for previously excluded groups.
- While you needn’t be married to be eligible, you still have to meet the net worth requirement.
- Kim explains how definitions have changed for non-retail and quasi-institutional investors.
- The third category is charitable organizations, where their assets exceed $5 million.
- New additions include SEC or state registered investment advisors, rural business investment companies, and foreign-organized entities.
- An additional qualifier is family offices with at least $5 million in assets under management.
- These rules are not in effect yet – they need to be published in the federal register and cure.
- Kim explains the necessary requirements for Regulation D Rule 506(c) and 506(b) offerings.
- There is a lot of value in employing an attorney to help you read between the lines.
- Kim thinks an accredited investors test or more formalized program would be a great idea.
- The way Kim suggests that investors get accredited is they attend the same training classes the syndicators they are investing with do.
- You must understand the distribution waterfall, otherwise Kim would be cautious of the deal.
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