Ask HN: Possible loophole for angel investing net worth restriction?

1 pointjohnrob2 comments

In order to be an accredited angel investor, you either need to have a minimum salary (250K/yr?) or a minimum total net worth (1 MM?).

Question - what if you incorporate a company, and use that company to make investments? Would that be sufficient to bypass the restrictions?

I'm not necessarily recommending that anyone actually do this, I'm just curious whether it would be legal.

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Those numbers come from the SEC.

http://en.wikipedia.org/wiki/Accredited_investor

http://www.sec.gov/answers/accred.htm

If you want to incorporate a company in order to make such investments, then you're going to have to register with the SEC. The phrase that comes to mind immediately after "OMG! NO!" is "you'll be sorry!"

http://en.wikipedia.org/wiki/Investment_Company_Act_of_1940

No. A business can only be an accredited investor when all of the owners are accredited investors themselves.

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