abstract
| - William C. Skelley coined the term "Accredited Crowd Funding" and trademarked it in July 2012. Accredited crowd funding allows accredited investors to pool small amounts of capital together to make investments in large-scale opportunities which they may not have access to as an individual. Accredited crowd funding is a different concept than crowd funding because the target market is only accredited investors. Accredited crowd funding is not restricted to a maximum amount of capital it is allowed to raise like normal crowd funding (e.g. maximum $1MM in 12 month period) which does not target accredited investors as its core market. A definition of an accredited investor is listed below: Accredited Investors Under the Securities Act of 1933, a company that offers or sells its securities must register the securities with the SEC or find an exemption from the registration requirements. The Act provides companies with a number of exemptions. For some of the exemptions, such as rules 505 and 506 of Regulation D, a company may sell its securities to what are known as "accredited investors." The federal securities laws define the term accredited investor in Rule 501 of Regulation D as:
* a bank, insurance company, registered investment company, business development company, or small business investment company;
* an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;
* a charitable organization, corporation, or partnership with assets exceeding $5 million;
* a director, executive officer, or general partner of the company selling the securities;
* a business in which all the equity owners are accredited investors;
* a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person;
* a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or
* a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes.
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