From your comment, it sounds more like you believe the 'accredited investor' rules are bad. These are pretty readily bypassable if you know how, but how does that relate to the quantity of microlending -- becuase potentially only a few can participate? I'm not trying to be argumentative, just understand your point of view. I see no downsides.
I'd rather deal with 3 people giving 200k than 30 people giving 20k. The downside of relaxing the accredited investor rule is the con artists will come out of the woodworks to get blind, senile grandma to invest in "amazing business opportunities". Personally, I think the rules are about right as they are. See above about LLC bypass if you really have a current need and can convince your non-accredited investors to go through the hassle.
But I'd rather deal with loans than equity if the equity doesnt also give expertise. The type of quick equity fund you describe would likely have to offer convertible debt (ie lending) or force the risk of being crammed down regularly. And without the expertise, there is no downside for the entrepreneur to screw these $500 investors out of their money regularly.
So if you are already lending (convertible debt->equity) then how is this different from microlending?
Regardless, I see your point about flexibility, I just personally cant see it as all that much more useful than microlending for either side.
From what I understand (I am not a lawyer), you can bypass 501 if the investors LLC-ify themselves and are active members in their own LLC before investing.
Startups cant do this, becuase its not on their end, its on the investors end. And most investors dont want to deal with all of this hassle.
But the main point is, I dont believe you have to Qualify 501 for organizations who invest in yours, only individuals. Hence the bypass.
All that said, Ive never actually done this, so who knows.
I still think you can get around this with active vs passive. I personally have had investors use LLC's who have less than $5mm in assets, but we set them as an active investor. This was done by an attorney with expertise in the area.