[ttul]

Well, maybe. But if your net worth is < $2M and you want to build a portfolio of 20 or so startups and then let that play out for a decade until one or two have popped and the rest failed or languished, you are going to need steel balls.

[anamax]

20 is barely enough. You really want 30-40.

The problem is variance. If 70% fail and only 10% produce meaningful returns, you want >>10 so you have a reasonable chance of getting average returns.

It's possible to get lucky with 5-10 startup investments but the common result is "lost everything" with "broke even" a close second.

This applies to working for startups as well....

[vmception]

But you can also invest in a fund that gets better deal flow, and your exposure can be more easily spread around.

[cortesoft]

You don't need to be an accredited investor to invest in a fund that invests in startups.

[sanderjd]

Is this true? Wouldn't it have to be publicly traded? What publicly traded seed / venture funds are there?

[iammisc]

The commenter you replied to above is half true. Accredited just means you can invest in securities not registered with the SEC, like your friend's bakery. Some funds are registered with the SEC, some are not. Some funds only accept accredited investors, some do not.

Anyone can sell stock to non-accredited investors... it's just that it costs much more to do so, so most don't. Instead, they go to the already rich upper-class and make them richer when the investments pan out.

One aspect that goes completely unmentioned in all this is the racial aspect. Many people want equality today, but the fact is that for many minorities, they are dependent on an upper class that is mostly white to raise their money. Instead of being able to issue stock directly to members of their own community (and people they likely have closer relationships with), they have to make a case to people they've never met and are not daddy's best friend. If we really want equality, it's time to end these restrictions.

[lovecg]

The SEC actually recognizes the issue and is studying possible revisions though no changes have been made yet: https://www.sec.gov/files/review-definition-of-accredited-in...

There are some reasonable sounding ideas they list:

- Permit individuals with a minimum amount of investments to qualify as accredited investors.

- Permit individuals with certain professional credentials to qualify as accredited investors.

- Permit individuals with experience investing in exempt offerings to qualify as accredited investors.

- Permit knowledgeable employees of private funds to qualify as accredited investors for investments in their employer’s funds.

- Permit individuals who pass an accredited investor examination to qualify as accredited investors.

[vmception]

its good you are aware of their work and on board with the research

you should recognize that's 6 years old and everything that was going to change has already changed, the article of this very thread is about using the new changes

> - Permit individuals who pass an accredited investor examination to qualify as accredited investors.

Only a further expansion this last point is what is on the table. As taking several FINRA tests do now allow for qualification as accredited (as seen in OP's article), and people get to submit new non-FINRA tests, their approval has not occurred yet.