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Comment by octaveguin | Hacker News Reader

The law you're referring to is more about marketing investments.

You're still free to give your friend 10k for a startup.

It's to prevent boiler room style organizations that quite effectively convince people without much information that an investment is sound when it's not.

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    You're still free to give your friend 10k for a startup.

Uh? As a gift but not an investment on his company, that's illegal if you're not accredited.

What? I can't take 10K from my parents/friends and give them equity?

Don't quote me on this, but there's a specific-ish exemption for family/friends if I recall correctly.

there are specific exemptions for family, for friends and for fools ;)

It's highly limited. If you have 300 friends you can't take $10k from each, unless they are accredited.

This is why syndicates exist. Not a problem at all. Edit: not the only reason why they exist :) but a major one. To explain a bit more: syndicates allow you to consolidate multiple investors (not necessarily acredited) in an investment vehicle that then owns a chunk of stock in the company.

This is incorrect. Some unaccredited investments are allowed, and above certain thresholds it just triggers onerous reporting requirements. It is not illegal to make unaccredited investments. It is illegal to market/promote to unaccredited investors however.

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