🎉 Happy Friday, Funds Family!

You might not believe it, but we have more deregulation on the docket.

This week, we’ll discuss a new bill in Washington, D.C. that would significantly expand the pool of accredited investors.

What is an Accredited Investor…and Why Does it Matter?

If you’ve been living under a rock and neglecting to read the Fundamentals newsletter, shame on you! 🙃 

We forgive you, but you should read this article on the ⚖️ Securities Act ASAP.

In general, most investment funds and syndications restrict their LP pool to accredited investors. While some 506(b) funds admit non-accredited investors, they’re the minority. In practice, only accredited investors are able to access alternative private investments.

How Can You Be an Accredited Investor?

There are many ways to be accredited, but the most common are:

• Individual with $200k annual income (or $300k joint income with spouse) for the last two years with an expectation to continue earning income above the threshold.

• Individual with $1 million net worth (excluding the value of your primary residence).

• Individuals who has passed certain securities professionals tests and are in good standing (Series 7, Series 65, Series 82).

• Entity with at least $5 million in assets.

• Entity in which all equity owners are accredited.

In short, to be an individual accredited investor, you have to be relatively rich. And many people have complained about this over the years.

𝗛.𝗥. 𝟯339 – The Equal Opportunity for All Investors Act of 2025

🔗 The Equal Opportunity for All Investors Act of 2025 (H.R. 3339) would expand the definition of “accredited investor” to include people who pass a free financial sophistication test. This is something people have been requesting for years.

According to the bill, the test would need to be implemented within one year.

What does this mean? The pool of “accredited investors” gets a bit deeper, and you don’t need to be rich to become accredited. So long as you pass the test, you will have access to 506(c) offerings and 506(b) offerings limited to only accredited investors.

When paired with 506(c), this means broadly solicited “private” offerings of securities can now be marketed to a broader public. This might make public fundraising a lot more widespread and interesting.

The good news is that access to capital gets easier.

The bad news is you’re about to get more DMs asking you for money.

🐎 Hold your horses

Just like the last batch of regulations…this isn’t a law yet (so don’t get too excited yet!), but we’ll be monitoring their progress as it winds through the hedge maze of Capitol Hill.

Thanks for reading, everyone.

Have a great weekend! 🙌 

/ WRAPPING THE CASE

/ JURY TRIAL

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⚠️ Note: This newsletter is for informational purposes only and nothing should be considered legal advice. For that, hire a lawyer! I am a lawyer, but not your lawyer (unless I actually am your lawyer because you’ve signed an engagement letter and we’re working together). This newsletter may be considered attorney advertising.