Congress took the first step today to let more investors put their money in startups. Startups would be allowed to have 2,000 less wealthy “non-accredited” investors, up from the current 500 in legislation that cleared the House Financial Services Committee. The higher limit would let more moderate-income investors invest in startups before companies go public. The SEC’s rationale to limit startups to the wealthy has been the affluent have more ability to assess emerging companies without the greater corporate disclosures that public offerings bring. The limit was also adopted with the thinking wealthy are seen as better able to cope with the high loses that often happen in startup investments.

Source: Forbes March 21, 2018 19:51 UTC