VC follows a power law and the vast majority of these investments will fail.
$200k/year may be "relatively low" in certain areas, but it borderline unattainable in many parts of the country.
People can be smart, and perfectly capable of understanding the risks with offerings in their own industry, without making 200k/year. Don't automatically discredit people with airquotes based on their salary alone.
There are also many people who make more than $200k/year who are, quite frankly, not "financially sophisticated enough to take on the risk".
Matt Levine has it right- just peg the total amount of investments in these sorts of vehicles to 10% of cash, stocks, and bonds, until the investor crosses the $X million dollar mark.
Upper-income households (double the national median) account for 20% (side note: yeah, we have a yawning wealth gap). Those household incomes are $207,400 in 2018. So I'm not going accept your 3% number.
https://www.pewsocialtrends.org/2020/01/09/trends-in-income-...
> Upper-income households (double the national median) account for 20% (side note: yeah, we have a yawning wealth gap). Those household incomes are $207,400 in 2018. So I'm not going accept your 3% number.
You are comparing two different things, so your objection is invalid.
Also, as noted elsewhere, part of this change was to expand what incomes in the household count towards the accredited investor threshold. Some number of those households didn't qualify because some portion of their household income didn't.
It looks like the current certifications are restricted to those of financial professionals [1] and employees of funds [2]. That doesn't strike me as nuts.
[1] holders in good standing of the Series 7, Series 65, and Series 82 licenses
[2] natural persons who are “knowledgeable employees” of the fund
Yes, I would like to read Matt Levine rip this apart.
After specifying that "holders in good standing of the Series 7, Series 65, and Series 82 licenses as qualifying natural persons," the bullet point adds that the SEC chose this "approach [to provide] the Commission with flexibility to reevaluate or add certifications, designations, or credentials in the future."
So no, at this point, only holders in good standing of those licenses are included in this part of the amendment.
Even the SEC commissioner's have pointed out this incongruency.
The only thing supporting this difference is that gambling is regulated at the state level, while securities are regulated by the Feds with a few exemptions so that states feel like they have power. Spot commodities and uncategorized property are ignored by both.
Smart people that are not born into a useful amount of money have to earn and hope absolutely nothing goes wrong for decades, while being cut out from many growth opportunities, but they are able to speculate in many other financial games anyway. There are plenty of smart people that were earning where nothing was going wrong, until suddenly the pandemic sent them back to their parent's house where they will stay for the next decade.
This dichotomy in opportunities wasn't an issue when the equities sector was structured differently. Before the 21st century, companies were going public much earlier and much more frequently. There simply are not Microsoft's and Amazons going public at $37 million valuations anymore.
So now it is an issue.
I really don’t know what you are talking about anymore. Turn down the trolling. Congratulations if you have enough money not to care what others are going through. Try not to discount the luck involved in that.