Remarks at SEC Small Business Capital Formation Advisory Committee Meeting

Washington D.C.

Thank you, Carla [Garrett] and thank you to the Committee members and today’s panelists. I am pleased that today’s discussion will focus on the accredited investor definition.

If we’re going to increase participation in our capital markets by a broader group of investors and founders, we need to move off measuring the ability to participate in private markets by wealth and income.

Starting a business if you’re an Ivy Leaguer living in New York City with a wealthy network might not run into any difficulties from the current thresholds, or whatever they might be raised to in connection with the rulemaking on the Chair’s agenda.[1] It’s a whole different story for a founder with a good idea and a community that believes in her, but who doesn’t have generational wealth or high income. That story too often ends with the founder giving up her dream.

A couple of years ago, we took a step toward expanding our view of the type of individuals that can be deemed accredited investors.[2] The concrete changes—expanding the definition to include certain financial professionals—weren’t revolutionary, but we opened the door to further expansion to include certain professional certifications, designations or credentials or other credentials issued by an accredited educational institution. Nobody has yet walked through that door, but I remain hopeful that someone will.

Until yesterday, I thought there’d be no appetite for a complete elimination of the wealth and income thresholds. My philosophical argument against them—that people’s dignity requires that they, not the government, should decide how to spend and invest their money—has not found receptive ears in the building. Yesterday, however, the Commission proposed retail-like protections for private fund investors.[3] If those protections are finalized, the argument for keeping retail investors out of private funds weakens. Wealthy investors, the argument went, could look out for themselves. I guess we’re not saying that anymore, so what remaining justification is there for barring less wealthy investors from private markets?

I look forward to your discussion today. Your conversations will help us to focus on how the accredited investor thresholds affect the ability of new and growing businesses to raise capital.

[1] SeeSecurities and Exchange Commission, Exempt Offerings, Agency Rule List (Fall 2021), available at

[2] See Press Release, SEC Modernizes the Accredited Investor Definition (Aug. 26, 2020), available at

[3] See Press Release, SEC Proposes to Enhance Private Fund Investor Protection (Feb. 9, 2022), See also Commissioner Hester M. Peirce, Statement on Proposed Private Fund Advisers; Documentation of Investment Adviser Compliance Reviews Rulemaking (Feb. 9, 2022), available at

Last Reviewed or Updated: Feb. 10, 2022