SEC ‘Accredited Investor’ Definition Tweak Faces Equity Concerns

SEC ‘Accredited Investor’ Definition Tweak Faces Equity Concerns

February 22, 2022, Bloomberg Law

Brad Chernin was quoted in Bloomberg Law regarding the direction the SEC would head in when redefining accredited investors. According to Brad, “Looking at the accredited investor definition is sort of one more lever that the SEC is looking at for a safer marketplace.” Brad continued, stating, “Increasing the minimum asset requirements ‘really would exclude a large number of people, but probably have a smaller impact on the actual amount of money available’ to startups.”

Brad then states, “Still, such an asset-requirement increase raises questions about equity and inclusion for communities that historically have faced barriers to participating in capital markets.”

Finally, Brad said, “A startup founder who wants to raise capital from underrepresented communities might feel ‘more constrained’ if the SEC’s new definition limits such investors’ access.”

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