As strange as it may seem, only a small percentage of Americans can legally invest in most startups today. Under long-standing rules governing who qualifies as a so-called “accredited investor,” only quite wealthy individuals (those make at least $200,000 in annual income or have $1 million in assets, excluding their home) can buy shares in a fast-growing, privately held company.
This “accredited investor” definition is extremely important for the startup ecosystem, since the most common legal arrangement that startups use to raise funds limits participation almost exclusively to accredited investors.
