Legal Question in Securities Law in California

Venture Capital Investing

What is the criteria for an individual investing in a venture capital fund? Do they need to be an accredited investor? Is there a minimum range in which an individual would not need to be an accredited investor (ie. if an individual invests $1,000 in a venture capital fund do they still need to be an accredited investor to do so)?


Asked on 6/18/09, 10:41 am

2 Answers from Attorneys
Adam S. Tracy Securities Compliance Group Ltd

Re: Venture Capital Investing

Thank you for your question. The plain answer is "no", you would not necessarily have to be an accredited investor. Most VC funding is made under an exemption from securities registration known as Regulation D. Of the various rules under Reg D, certain ones allow for the sale of securities to a limited number of non-accredited investors. Feel free to contact me should you have any follow up questions or care to elaborate further. [email protected]

Thanks,

Adam

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Answered on 7/04/09, 11:52 am
Richard Gee

Re: Venture Capital Investing

Usually, yes, they need to be an accredited investor in order to protect the Venture Capital fund from liability down the road.

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Answered on 6/25/09, 2:00 pm


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