Limits on How Much You May Invest

The SEC sets a limit on how much you may invest in Title III offerings within a rolling 12-month window. This limit depends on whether you are an “accredited investor”, your annual income, and your net worth.

Accredited Investors

If you are an “accredited investor,” you can invest as much as you want in offerings under Title III. The term “accredited investor” includes:

• A natural person who has individual net worth, or joint net worth with the person’s spouse or spousal equivalent, 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 or spousal equivalent exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year;

• A natural person who holds any of the following licenses from the Financial Industry Regulatory Authority (FINRA):  a General Securities Representative license (Series 7), a Private Securities Offerings Representative license (Series 82), or a Licensed Investment Adviser Representative license (Series 65);

• A natural person who is a “knowledgeable employee” of the issuer, if the issuer would be an “investment company” within the meaning of the Investment Company Act of 1940 (the “ICA”) but for section 3(c)(1) or section 3(c)(7) of the ICA;

• An investment adviser registered under the Investment Advisers Act of 1940 (the “Advisers Act”) or the laws of any state;

• Investment advisers described in section 203(l) (venture capital fund advisers) or section 203(m) (exempt reporting advisers) of the Advisers Act;

• A trust with assets in excess of $5 million, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person;

• A business in which all the equity owners are accredited investors;

• 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 bank, insurance company, registered investment company, business development company, small business investment company, or rural business development company;

• A charitable organization, corporation, limited liability company, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets exceeding $5 million;

• A “family office,” as defined in rule 202(a)(11)(G)-1 under the Advisers Act, if the family office (i) has assets under management in excess of $5,000,000, (ii) was not formed for the specific purpose of acquiring the securities offered, and (iii) is directed by a person who has such knowledge and experience in financial and business matters that such family office is capable of evaluating the merits and risks of the prospective investment;

• Any “family client,” as defined in rule 202(a)(11)(G)-1 under the Advisers Act, of a family office meeting the requirements above, whose investment in the issuer is directed by such family office;

• Entities, including Indian tribes, governmental bodies, funds, and entities organized under the laws of foreign countries, that were not formed to invest in the securities offered and own investment assets in excess of $5 million; or

• A director, executive officer, or general partner of the company selling the securities, or any director, executive officer, or general partner of a general partner of that issuer.

Non-Accredited Investors

If you are not an accredited investor, Title III limits how much you can invest every year – not only in any one company, or through any one Funding Portal, but also in all companies through all Funding Portals. These limits apply only to your investments under Title III (Regulation Crowdfunding), however.

Specifically, if you are not an accredited investor the maximum amount you can invest in all Title III offerings during any period of 12 months is:

• If your annual income or net worth is less than $107,000, you may invest the greater of:

  • $2,200; or

  • 5% of the greater of your annual income or net worth.

• If your annual income and net worth are both at least $107,000, you can invest the lesser of:

  • $107,000; or

  • 10% of the greater of your annual income or net worth.

These limits are adjusted periodically by the SEC, based on inflation.

You and your spouse may combine your incomes and assets for purposes of determining how much you may invest, although if you do so, you will be treated as a single investor for purposes of determining how much either of you may invest.