New SEC Rule Could Harm Angel Investors, Association Says

Photo courtesy of Creative Commons
Photo courtesy of Creative Commons

The Angel Capital Association issued a statement last week saying that many angel investors — the wealthy individuals who provide money to early-stage companies — would refuse to participate in a process that the Securities and Exchange Commission outlined last week due to a provision of the JOBS Act.

The Jumpstarting Our Business Startups Act and the SEC are dictating that a firm issuing securities under a new rule must verify that it’s selling only to accredited investors, meaning people with at least $1 million in assets or $200,000 of annual income.

However, the Angel Capital Association’s executive director said those requirements were too intrusive and will curb angel investing.

Read more from the St. Louis Post-Dispatch


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