Entrepreneurs can raise up to a certain amount of their securities without having to register the transaction with the SEC. Before, that amount was $1.07m, and now it’s $5m. This amendment comes after there’s been more conversation around expanding opportunities to invest in startups. Last month, the SEC changed another rule, expanding its definition of an accredited investor.
Accredited investors previously had to meet certain income and wealth requirements. Now, the SEC has expanded that pool to other individuals who may not meet the income and wealth requirements, but have other proof of “financial sophistication,” according to Newsday.