{"id":332,"date":"2014-01-14T14:39:37","date_gmt":"2014-01-14T19:39:37","guid":{"rendered":"http:\/\/www.accreditedinvestorleads.com\/?p=332"},"modified":"2020-01-21T12:08:18","modified_gmt":"2020-01-21T16:08:18","slug":"verification-for-accredited-investors","status":"publish","type":"post","link":"https:\/\/www.accreditedinvestorleads.com\/verification-for-accredited-investors\/","title":{"rendered":"Online Verification for Accredited Investors"},"content":{"rendered":"
The JOBS Act contained provisions that would allow companies issuing a private placement to advertise their offering to Accredited Investors. \u00a0After much deliberation, the SEC created Rule 506(c) to lift the ban on general solicitation. \u00a0This creates an excellent opportunity for business owners, entrepreneurs, and real estate developers to market their PPM. \u00a0Their is, however, a caveat. \u00a0Companies can no longer use the “check a box if accredited” method. \u00a0They actually have to get an online verification for accredited investors.<\/p>\n
The SEC determined that verification can include:<\/p>\n
This change may seem small but it is significant because it exposes investors by making private data public. \u00a0Many investors will not want to go through this process with multiple companies on multiple deals. \u00a0Recognizing this, Crowdentials is working on a solution. \u00a0They have raised $300,000 to complete an online verification process so when Accredited Investors want to invest in a deal the process goes smoothly with limited paperwork.<\/p>\n
In the Crowdentials platform a start-up uploads their list of investors and pays a $20 -$40 fee for each one to become verified. \u00a0Crowdentials completes the initial verification and keeps it up to date over time, without charging an additional fee. \u00a0Lead investor Charles Stack said, “This kind of vetting used to cost start-ups and venture firms hundreds to thousands of dollars per deal or fund.”<\/p>\n
Crowdentials is working with institutional investors, banks, businesses, and crowdfunding sites to provide ongoing online verification for Accredited Investors. \u00a0They aren’t the online only verification option. \u00a0Other companies include\u00a0CrowdCheck and CrowdBouncer LLC. \u00a0Additionally several of the investment crowdfunding sites are offering this service, including SeedInvest and CircleUp Network Inc.<\/p>\n
Working with a third party eliminates some of the ongoing compliance headaches of issuing a private placement offering. Those companies that want to verify investors themselves should do the following:<\/p>\n
If you are too busy to certify investors, or they are concerned about releasing information, use a third party company to help the online verification for accredited investors to complete the process. \u00a0This can save you time while giving your investors confidence. \u00a0Remember, this is specific to Rule 506(c) of Reg D. \u00a0If you are using a different rule, Rule 504 for example, you can continue to verify investors like normal.<\/p>\n
The JOBS Act contained provisions that would allow companies issuing a private placement to advertise their offering to Accredited Investors. \u00a0After much deliberation, the SEC created Rule 506(c) to lift the ban on general solicitation. \u00a0This creates an excellent opportunity for business owners, entrepreneurs, and real estate developers to market their PPM. \u00a0Their is, however,<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[63],"tags":[],"yoast_head":"\n