Small businesses need more access to capital, and small investors need more investment options. Those were the prevailing messages at Wednesday’s hearing by the House Subcommittee on Capital Markets, part of the House Financial Services Committee.
Entitled “Sophistication or Discrimination? How the Accredited Investor Definition Unfairly Limits Investment Access for the Non-wealthy and the Need for Reform,” the hearing explored broadening the definition of an “accredited investor”—individuals permitted to invest in early-stage private companies. Under current law, to be accredited investors must be worth over $1 million, earn over $200,000 in annual income, or obtain a securities trading license.
“Congress must modernize the outdated accredited investor definition and expand the number of individuals who qualify as accredited investors to open up more funding opportunities for all entrepreneurs,” said the subcommittee’s chair Rep. Ann Wagner (R-Miss.)….