As you saw above, the difference between accredited and non-accredited investors has a significant bearing on the type of securities you will choose to offer and the exemption you will be able to take under Regulation D.
Rule 501 of Regulation D details the difference between these investors. In short, it explains that accredited investors like banks, businesses, insurance companies, etc. must have $5 million in assets or more, and individual investors must earn at least $200,000 annually, or $300,000 if they are a married couple or have a net worth over $1 million.
Any investor that does not meet the above criteria is considered non-accredited, according to the SEC.
Regulation D requires that the majority of your investors be accredited. Depending on the Rule under which your offerings fall, you must comply with the limit on the number of non-accredited investors you allow to purchase your securities. An attorney experienced in real estate and securities law can help you find the most appropriate exemption for your business and build a strategy for effective fundraising.
A healthy marketing plan and a thorough procedure for selling your securities will ensure your real estate venture’s smooth undertaking. This involves the process to qualify investors and solicit, or advertise, effectively under applicable securities regulations, and marketing to and informing your investors regarding the offering. The attorneys at Moschetti Law Group are well-versed in Regulation D’s rules and how to leverage the appropriate exemption for your business. Contact us today for a free, no-obligation strategy session.
No matter the type or number of investors, your business must disclose specific information on the offering by completing Form D. This form must be completed and submitted within 15 days of your first sale. Hence, it’s imperative to know what elements need to be included and how to submit your paper or electronic copy to the SEC.
Your real estate attorney can help you with any questions you might have and review the information in your Form D that will include disclosure of all stakeholders in your company, the involvement or not of a broker, and details regarding your offering.