The following Letter Type E, or variations thereof, was submitted by individuals or entities.
Letter Type E:
The Honorable Mary Jo White, Chairman
RE: Accredited Investor Definition
Dear Chair White:
I am a member of Golden Seeds, one of the nations largest angel groups, with nearly 300 members. Our group is nationwide, and dedicated to evaluating, funding and helping companies with at least one woman in a management role.
I am writing to urge the Commission to retain the current financial thresholds for an individual accredited investor at $1 million of net worth and/or $200,000 of income. These thresholds have worked well for decades, enabling angels in groups such as Golden Seeds, or individually, to provide early-stage investment capital to entrepreneurs across the United States.
As you know, angel investors are by far the largest source of early-stage capital in the U.S. In 2013, more than 295,0001 accredited angels invested more than $241 billion in over 70,0001 young companies, nationwide. These young, innovative companies are the source of most new jobs created in our economy. Without angels investment, mentoring and guidance, many of these companies would never come into being. Breakthroughs in technology, life sciences, education and many other fields would be foregone forever.
I am aware that some seek to have the financial thresholds raised to reflect inflation — suggesting they be increased to approximately $2.5 million and $400,000, for net worth and income, respectively. As the Commission is aware, this could eliminate nearly 60 percent of the current accredited investor population. The consequences would be devastating to early-stage companies and the innovation and job growth they provide to the U.S. economy. Our national history of providing capital to fuel innovation is the envy of much of the world and we should be extremely cautious about any changes that will disrupt this productive ecosystem.
During the past nine years, Golden Seeds has invested more than $70 million in 65 early stage companies, most of which include a Golden Seeds member on the board of directors, and all of which have received extensive guidance from our outstanding network of members. In total, the Golden Seeds angel network alone has evaluated more than 2,400 companies for investment, and our members have worked with hundreds of entrepreneurs to guide them to the best path for success. I believe this activity is essential to the economic health and growth of our nation, and ask the Commission to retain the current accredited investor financial thresholds, to ensure that unintended consequences do not damage the robust, successful U.S. system of funding early ventures.