Can a startup raise money from non-accredited investors?

Entrepreneurs are often advised to raise money from accredited (i.e., wealthy) investors only only.

It's true that limiting an offering to AIs poses fewer regulatory burdens and probably fewer risks. And many institutional investors prefer to see cap tables without AIs.

But not all founders have access to a pool of wealthy investors.

In those cases, the bias against non-AIs can keep founders stuck and unable to access needed capital they need to grow their business.

Securities laws do require more investor protections when raising money from non-AIs - and for good reason. It’s important to understand and comply fully with those requirements.

But they are not as daunting (or expensive) as conventional wisdom says.

The bottom line for entrepreneurs is this:

It is 100% possible to raise capital from non-accredited investors in an ethical manner and in full compliance with all relevant securities laws.

We do it all the time.