January 23, 2020
The definition of eligible entities should include public universities that are state agencies, which are not necessarily 501(c)(3) organizations. Public universities, such as the University of Massachusetts, have active investment in their start-up companies under the Bayh-Dole Act with licensed technology, which can include equity and non-equity income. The Accredited Investor issue occurs frequently because of the nature of start-ups. In order to circumvent this issue, public universities have to create 501(c)(3) organizations to hold equity received from startups. It would be beneficial to public universities to have to avoid this step.