A bill introduced by U.S. Reps. French Hill (R-AR) and Juan Vargas (D-CA) would expand the definition of an accredited investor to allow Americans who demonstrate education or experience to invest in private offerings.
The Fair Investment Opportunities for Professional Experts Act would help expand the pool from which small businesses can raise start-up or expansion funding. Hill has introduced the legislation several times to help small businesses access capital. Most small companies are limited to “accredited investors,” when it comes to raising money in the private market, officials said. As a result, Hill said, only wealthy individuals can participate in private offerings which eliminated the majority of Americans from participating in those investment opportunities.
“Wealth alone should not dictate who can and cannot invest in private offerings. Countless individuals – through work, education, or other experiences – have developed the knowledge to make informed investment decisions yet are excluded simply because of their income level,” Hill, the chair of the House Committee on Financial Services, said. “Our bill addresses this imbalance by expanding investment opportunities for capable investors while helping small businesses access the capital they need to grow.”
The bill would expand the definition of an accredited investor to include those with the education, professional experience or other credentials, allowing them to participate in those private offerings. Currently, “accredited investor” is defined by an individual’s financial status.