Tilden Moschetti: accredited
investors, you probably have

questions outside of just what
is an accredited investor? This

video, we're going to go through
exactly those questions that I

hear most often.

So just what are those big
questions around accredited

investors? It seems
straightforward enough, doesn't

it? Let's go through the basic
definition real quick, just so

that we have that on the tip of
our tongue. So we understand it

in it's all its context. And
then we're gonna go through

those four questions. An
accredited investor is typically

thought of as an individual who
meets either the income test, or

they meet than that wealth test.
Now, the income test for

accredited investors is anyone
who makes over $200,000, for the

past two years, expects to make
the same amount or more this

year, or $300,000. If they're
counting the income from a

spouse, then that wealth test is
$1 million of net wealth, which

does not include the equity in
the family home. That's the

basic definition of an
accredited investor who can

invest in a Regulation D 506. C
offering. Obviously, they can

invest in a 506 b offering as
well. Now a so what are those

four questions because I get
them all the time. So the first

one is, well, if I'm not a
accredited investor, but I'm

sponsoring it, how am I supposed
to invest? Well, not to worry,

you actually, if you are the
sponsor of a syndication, you

can invest yourself. Rule 501 A,
which is where the Reg D talks

about what an accredited
accredited investor is, has a

specific thing for you. So rule
501, a subsection four is your

your grant of being an
accredited investor. There it

says, any director, executive
officer, or general partner of

the issuer of the securities
being offered or sold, or any

director, executive offer
officer or general partner of

any general partner of that
issuer is considered an

accredited investor. So if you
are not an accredited investor,

by the definition we talked
about earlier, you are an

accredited investor, if you are
the sponsor yourself, or if

you're part of a membership of
the sponsor. The second question

I get a lot is What can an LLC
invest? I have a lot of

investors who just want to come
together and pool money in order

to meet my minimums? The answer
is yes, most of the time. An LLC

can invest. And that we find in
rule 501, a subsection eight or

nine, they both apply here. Now,
under eight, under 5018. It says

any entity in which all of the
equity owners are accredited

investors. So that's gonna lead
us to our next question in just

a minute. But in any of those,
any entity where all of those

owners are accredited investors,
basically, the note to the rule

says we can look open up the
LLC, look in see who all the

members are. And if they all are
accredited investors, that's

fine. They're all accredited
investors. If under 501, a nine,

though there's another
exception. So any entity which

is not listed above, so in this
case in paragraphs, a eight. And

if that entity if that LLC was
not formed for the specific

purpose of acquiring just you're
offering that and they have

investments in excess of $5
million, all right. So if it's

got $5 million, that it invests
around, and it was not set up

just to invest in yours, then it
can be considered an accredited

investor. So that other question
that I told you we would

discuss, which I hear all the
time is, well, how about this?

Can I get a bunch of investors
together who are accredited and

non accredited? They go into an
LLC, and then they invest in my

506 seed? The answer is no.
That's the answer. So why No,

because they're not all
accredited investors under eight

under 5018. And they also
probably don't have over five

mil billion dollars of net
assets of investments that

they've invested into. And we're
only set up for the purpose of

investing in your, your, your
entity. So under that, no, it's

not likely that you'll be able
to pull everybody. Now, if

you're doing a 506 b offering,
the answer is yes. But we have

to count each non accredited
investor against that 35 non

accredited investors in every 90
day period. So it counts against

that. So they can form an LLC
and invest in a 506 B, but we're

still counting all the non
accredited investors. The last

question is, well, is there some
sort of I'm a certified

financial planner, or my brother
in law's a Certified Financial

Planner? Can he just invest
because of his credentials? He

obviously knows what he's doing?
Well, the answer is, sometimes

they can, sometimes they can,
the SEC has come out with rules

that are that govern this. And
they are as it's allowed to

under 501. A, and where it's
what it's what the SEC has said

there are certain licenses that
you can have, that we will

count. So what are those
licenses? It's a series seven,

so general, broker dealer right,
they can invest in general

securities as a broker dealer,
unless series seven is allowed,

also a series 65, which is an
investment advisor

representative. And the third is
those who have also partake in

and are currently licensed under
series 82. So 82 allows people

to sell private securities, like
your Regulation D offering,

those people are considered
accredited investors just by

their licensed. Now, what's
surprising is that they didn't

give this to a much wider
variety of people. But the SEC

is very concerned about who they
are considering to be non

accredited investors versus
accredited investors. So those

are the rules that we live by.
My name is Tilden Moschetti. I

am a securities attorney for the
Moschetti syndication Law Group.

We specialize in just Regulation
D offerings and helping

syndicators put together those
offerings and give them all the

tools that they need to not only
be successful in putting those

together and being compliant
with the law, but also

consulting with them to in
whatever they need in order to

truly be successful, complete
their raids and make their and

have a successful syndication or
investment fund. If we can help

you I'd be happy to talk with
you. give my office a call, and

I'd love to talk with you soon.