Most private stock offerings are limited to "accredited investors", i.e., wealthy people and entities.

This limit is designed to protect the vulnerable from unscrupulous business practices.

(There are important and IMO under-utilized exceptions but that's a story for another post.)

The AI rule, which dominates private capital raising, can be very frustrating for both entrepreneurs (who want access to more investors) and investors (who don't want to be blocked from good investment opportunities).

For years, many have clamored for a more targeted approach to expand the capital base without compromising investor protections.

Last week, the SEC took the first modest step in that direction in decades.

Specifically, the SEC provided a pathway based on training and professional certification (rather than wealth) for individuals to qualify as an AI.

For now, only people with Series 7, 65, and 82 licenses qualify.

On a go-forward basis, we can expect other certifications to emerge that open the door to AI status.

Not an immediate game changer -- but a prudent and sensible step in the right direction. Would love to see more in this direction.

More from the SEC here: https://www.sec.gov/news/press-release/2020-191