[KoftaBob]

That's because its less about that and more about allowing a certain income class to have exclusive access to certain kinds of investments.

A VC firm that offers nothing more than money (larger % of them than you'd think) doesn't want to compete with tons of syndicates consisting of average retail investors.

The "accredited investor" gatekeeping allows them to provide very little value and say "doesn't matter, you need us because we're the very few that are allowed to invest in your company".

[SpicyLemonZest]

If retail investor syndicates can successfully compete with VCs, why aren't squads of senior FAANG engineers doing it today? They're comfortably over the accredited investor threshold.

[icedchai]

Probably because they make enough extra money investing in public markets with less hassle and much more liquidity. Why even bother with private investments? 90% of them are going to zero.

[TheRealSteel]

Precisely. If the government cared about protecting people from poor investments, they would ban gambling.

[icedchai]

If you work in tech, especially FAANG, you are likely surrounded by "accredited investors." There are a lot more of them you think.

[superflit]

Working for the finance industry.

This is the right answer

Gatekeeping