Does the JOBS Act allow me to invest even if I’m not accredited?

Title III of the JOBS (Jumpstart our Small Businesses) Act permits unaccredited investors to invest in startups via online crowdfunding platforms, subject to certain rules and regulations. 

FundersClub is an online venture capital firm – not a Title III JOBS Act crowdfunding platform. Currently, only accredited investors are permitted to invest on our platform. To learn more about the distinction between online VC and crowdfunding platforms, visit the FundersClub education center.

 Many observers have noted that due to the high regulatory burden and additional cost, time, and filing disclosures required to raise funding via Title III, it may be an attractive option only to startups that are unable to secure funding from incubators/accelerators, angel investors, traditional VCs, and online VCs.

This is because the relative cost of venture capital is lower when compared to the cost of Title III funding, making venture capital a more attractive option to high-promise startups.

It will likely take subsequent rules and regulations to correct these deficiencies, or potentially a complete overhaul of Title III. 

However, the Creating Financial Prosperity for Small Businesses and Investors Act, which recently passed in the House (391–2), may expand the definition of accredited investors to include individuals with education or experience related to venture investing. The bill is now up for a vote in the Senate. 

For more information about the impact of the JOBS Act and Title III, visit our education center.

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