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Keep An Eye On the U.S.-China Tech War

The U.S. government doesn’t trust big Chinese tech companies. Their close ties to the Chinese government mean that they can be used as instruments of the Chinese state. Hence, Trump’s ultimatum to TikTok to transfer ownership to willing U.S. buyers. 

The Chinese internet colossus Tencent is next on the White House’s hit list. And in this burgeoning tech war between the U.S. and China, there’s no telling who could be next.

But while all this is playing out in the headlines, things got a little more interesting at home. Yesterday, the CIA announced an interesting recruiting initiative for its new entity, CIA Labs. 

CIA Labs will  research and develop in various technologies including artificial intelligence, data analytics, biotechnology, advanced materials and high-performance quantum computing.

This puts CIA Labs in direct competition with Silicon Valley. Silicon Valley has dozens — if not hundreds — of companies madly scrambling to offer the best solutions in these very same areas. And getting top talent is key to their efforts. 

Government salaries pale in comparison to what venture-backed firms can offer. 

So, for the first time ever, the CIA is letting its officers file patents on the intellectual property they work on — and collect a portion of the profits. They can earn 15% of the total income from their new invention with a cap of $150,000 per year. That would double most agency salaries. 

Now, I’m sure the CIA would argue that what they’re doing is different than what China does… That they’re being open and transparent, as opposed to what’s done in the shadows in Beijing. 

But, listen, I had my cup of coffee with the CIA back in the Reagan days (yes, that far back!). And, I can assure you, a lot of what’s done in the CIA is not open to the public. 

What’s good for the goose is good for the gander. If we have every right to be worried (and we do) about the relationship of Chinese tech to a very powerful central government, they have good reason to be worried about what the CIA is doing. 

At the same time, this latest turn of events is nothing new. The government and Silicon Valley share a history that goes back to the very beginning of post-WW2. 

It all started right after the war ended. That’s when Fredrick Terman stole 11 top researchers from Harvard and brought them to Stanford. He landed his first government contract in 1946

By the start of the Korean War in 1950, Stanford was the CIA’s go-to institution for classified Cold War technology research. And Terman encouraged his students to form companies rather than become a university researcher or professor. 

The rest, as they say, is history. Fairchild was founded later that decade and eventually spawned more than 60 chip companies over the following two decades. The 1950’s also saw the launch of venture capital investing. The first Silicon Valley IPOs like Varian and HP took place then. They captured the attention of both east coast “risk capital” investors and San Francisco’s angel investors. 

The U.S. government — including the CIA — continues to actively support high-tech companies today. Its fingerprints are all over tech startups. I was just talking to the founder of a wood-burning stove company. He says the Department of Energy gave his company a $2 million grant to develop cleaner-burning stoves. 

Grants are a somewhat passive conduit to the startup community. The CIA has chosen more active ways to become involved. It works closely with other government agencies like the Intelligence Advanced Research Projects Activity to do basic but expensive research. It also maintains relationships with other venture capitalists working in the tech fields it’s interested in. And, amazingly, it also has its very own venture capital firm — In-Q-Tel

But tech is a global business. National borders are quickly breached when a superior tech solution appears. And it’s going to be an increasingly bigger problem for both China and the United States as both governments increasingly involve themselves in the tech sector. And there’s no consensus right now on what constitutes reasonable protective measures. 

Up to now, I’ve applauded startups that have benefited from government grants and other forms of government support. After all, it’s non-dilutive capital (my favorite kind!). But it’s getting complicated. How will such support affect the company’s global market reach down the road? That question is becoming increasingly relevant to companies and their investors. 

We’re swimming in murky waters. What a shame.

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The Hottest Sector in Venture Capital

Generally speaking, I don’t believe that online startup investors should have a set-in-stone investment thesis.

Since deals come to us, we have to invest in the most attractive ones that come along. If we stick to a certain industry or category, we screen out potentially good investments.

However, I do always take a close look at enterprise software and software-as-a-service (SaaS) deals. These are probably the most popular deal type in venture capital today. And for good reason. SaaS is a very attractive business model. It has high profit margins and a very “sticky” retention rate (customers tend to stick around for a long time). 

But while I always check out active enterprise software/SaaS deals,  I rarely find ones worth investing in. Because these deals are so popular,  the vast majority of great ones get snapped up by top-tier VC firms. And they never make it to a platform like AngelList.

But there are always exceptions. The best enterprise software/SaaS deal that I’ve invested in is probably Aircall. I found it through FundersClub — which had previously invested in the company. Because of that prior investment, FundersClub had “pro rata” rights (the right to invest in future rounds). 

In my experience, finding great enterprise software deals is often the result of “pro rata” situations like that. So if you can find a syndicate on AngelList that has pro-rata — or a deal like this on FundersClub — and the numbers look good, I say go for it.

But just be aware that great software deals are few and far between. Out of my 10 most successful deals, only one is an enterprise SaaS. And out of the 100+ startups I’ve invested in, only a small number (4 or 5) have been enterprise SaaS. Yes, these deals are very attractive. But they’re also very rare.

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The Real Lesson of the Snowflake IPO

On Wednesday, Snowflake (SNOW) went public in one of the most highly anticipated IPOs ever. 

Snowflake is a cloud data platform that helps companies efficiently organize and analyze huge databases. The company’s revenue is growing at a rapid 133% year-over-year rate.

Snowflake’s IPO priced at $120 for a valuation of $33 billion. That alone made Snowflake the most valuable software company ever at IPO, according to Fortune.

There are two primary problems here for those of us who are “retail investors.” First, only well-connected investors got in at the initial $120 price. Demand for this deal was so high that shares opened to the public at $245 and were trading at $290 at 12:47PM EDT on Wednesday.

Snowflake trading for $290.98 at 12:47 ET on Sept. 16, 2020

So unless they happened to have a connection at a major investment bank or Snowflake, most investors probably didn’t get in at the $120 IPO price. Warren Buffett’s Berkshire Hathaway — and other well-connected firms — invested at that price. But the rest of us didn’t have that option.

The second problem is that on its first day of trading, Snowflake was already valued at more than a $60 billion market capitalization! As a comparison, Twitter currently trades at a market capitalization of $32 billion. It’s true that Snowflake is growing much faster than Twitter. But it also only has a fraction of the revenue which Twitter does and is currently losing a lot more money.

The issue is that this week is the first time most investors will get a chance to buy Snowflake shares. And it’s already worth more than $60 billion. Snowflake is an impressive and disruptive company, true. But at that high of a valuation, there’s only so much upside left (and quite a bit of risk). The biggest gains were already made by Snowflake’s early private investors. The public never got a chance to buy when it was still small. 

One more thing. In February of this year, Snowflake raised $479 million at a $12.4 billion valuation from private investors. What could have possibly changed between February and today that made the company 5x more valuable? I believe the spike can only be explained by the bubbly financial environment we’re in today.

Private markets are where tech growth happens

Snowflake isn’t the only hot tech company to IPO at a crazy valuation. Today it’s rare to see any hot tech company IPO at a valuation of less than a few billion dollars. Just take Uber’s IPO at an $84 billion market cap and how Facebook was worth $104 billion when it went public as a couple of examples. Those are monstrously large valuations at IPO. And Snowflake is right up there with them.

Nowadays when a really hot tech company goes public, it’s often already a big and mature business. And the majority of investors’ gains were made in private markets.

This is one of the main reasons I continue to invest in private startups. It’s one of the only ways to get access to very fast-growing companies today. Of course, there’s also more risk involved in private markets. But that’s balanced out by the higher upside potential. Startup investing also requires a lot more patience than trading stocks — but in my experience that’s a benefit and not a bug.

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How Startups Can Help Protect Our Elections

We’re in the midst of a presidential election. Along with the campaigning, speeches and crowds is the inevitable increase in disinformation. I hate it. It gets in the way of an honest national discussion on issues that engage us and divide us. 

And I particularly hate it when it comes from abroad. But what happens today isn’t like the 1950s when the Soviet Union started disinformation campaigns in obscure left-leaning Italian newspapers. It planted fake news in them, which would then be picked up by the Austrian press, then German press, then appear in English or French newspapers. Eventually a U.S. daily or two would publish the story as fact. 

That’s a long way from what goes on today. Now thousands of bots can blitz American social media in minutes. 

And new technology is raising the stakes even higher. I call it “disinformation on steroids.” It’s the use of machine learning to create hoax videos. But these are not your garden variety “cheapfake”  videos we’re all used to. Most of those are pretty obvious and don’t need specialized expertise to produce. 

These new ones are “deepfakes.” They often depict famous people. The video looks like them and sounds like them, but it’s completely synthesized. Unlike cheapfakes, these videos are much harder to detect (take a look at these 10 examples). And that makes them much more dangerous.

Because they’re getting easier and cheaper to produce, they’re also proliferating. A recent study found more than 145,000 examples online so far this year. That’s nine times more than last year.

This goes way beyond hacking emails or the crude manipulation of cheapfake videos. Deepfakes are generated by artificial intelligence (AI). And they can continue to learn and improve. 

Earlier this month, Microsoft launched a detector tool in the hopes of helping find disinformation aimed at November’s U.S. election. It also warned that, “The fact that [deepfakes are] generated by AI that can continue to learn makes it inevitable that they will beat conventional detection technology.” 

But big names like Microsoft aren’t the only ones trying to address this critical issue. Startups are getting involved too. Sentinel is developing a detection platform for identifying deepfakes. Founder and CEO Johannes Tammekänd says that “we already reached the point where somebody can’t say with 100% certainty if a video is a deepfake or not.”

“Nobody has a very good method of how to detect those,” he adds, “unless the video is somehow ‘cryptographically’ verifiable… or unless somebody has the original video from multiple angles.”

This is a serious threat. I guarantee it: if technology can be used to influence political outcomes, public policy and — especially — who comes to power, it will be used for such ends. 

Deepfakes jeopardize the legitimacy of our elections. Tammekänd (who’s Estonian, by the way) is worried about this too. “Imagine,” he says, ” Joe Biden saying ‘I have cancer, don’t vote for me.’ That video goes viral.” 

And the technology to do this, he points out ominously, is already here.

I fear for our democracy and the integrity of our electoral system. There’s no “if” here, only “when.” And perhaps there’s a sliver of goods news here. This technology is just new and time-consuming enough that this presidential election may escape an onslaught of deepfake disinformation. 

Then again, I may be overly optimistic. The Washington Post fears a deepfake bomb could be dropped during November and December — a “delicate period,” it says, “when poll workers are counting mail-in ballots.”

I think it’s unlikely that the world’s governments will be able to effectively prevent deepfakes. It would also be a mistake to turn to the goliath tech companies like Facebook or Google. It would be very expensive for them to develop their own deepfake detection. Sure, they could afford it. But the incentives aren’t there. 

It will be up to tech-savvy startups… like Sentinel. It just raised $1.35 million in a seed round. I believe this is just the beginning. There will be other impressive but very small companies raising early-round funds. I’ll be on the look-out for them. And hopefully I’ll recommend one or two to my First Stage Investor members

The technology created by those startups is going to be critical in winning the battle against future deepfake disinformation campaigns. If we can support a couple of the best ones, it would be good for us — both as investors and as citizens.

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The Future of Venture Capital

AngelList’s new rolling funds — which we discussed a few weeks back — are likely to change how the platform operates considerably. 

The current system involves syndicate leads raising money on a deal-by-deal basis. I think that’s likely to stick around for a while. But I see rolling funds as the future of the platform. 

The current syndicate model is slow and clunky. It usually takes weeks to set up a deal and sometimes a month or more to close it. With a rolling fund, the money is ready to be invested as soon as it’s raised. It’s essentially the SaaS (software as a service) version of venture capital — it’s more flexible and requires less up front commitment from investors. The rolling fund manager can also move a lot quicker and get into more deals. The main drawback is that we’ll likely get less information about the companies we invest in. It will be more of a trust-based system.

So what does this mean for online angel investors like us? I suspect we should all be looking for potential rolling funds to join. I think it’s likely that many of the top investors on AngelList will be moving primarily to this format.

I recommend that you start looking at syndicate leads who you’d trust to run a rolling fund. Examine their track record and look at their deals. Invest in a few. Then inquire with the leads you like about whether they are raising a rolling fund. 

I think that rolling funds are the future of AngelList — possibly the entire VC industry. So I’m starting to get more familiar with them. And I’ll be evaluating potential funds to join.

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Learn How the Top VCs Choose Startups

This week top-tier venture capital firm Bessemer Venture Partners released the original deal memos from some of their best startup investments.

These memos provide a fascinating look at how VCs operate, think and make investment decisions. Today we’re going to look at a few highlights from these memos. But I strongly recommend you read them all

First, let’s take a look at Bessemer’s memo for their initial investment in Twilio in November 2009. Today Twilio is a $33 billion publicly-traded tech stock. When BVP first invested, however, it was a tiny seed-stage startup raising money at around an $8.5 million pre-money valuation cap.

At the time, Twilio was only producing around $17,000 in monthly recurring revenue (MRR). The startup didn’t even have a dedicated sales team yet. But BVP’s deal memo gives us valuable insight into why the firm thought Twilio had potential. Here’s an excerpt from the “Product” section.

The Twilio product makes the process of building a voice application extremely simple for web developers without any specialized training or need to deal with telecom companies or specialized integration service providers. Similar to consumer web apps, customers can sign up for an account with Twilio, pick a phone number (or port over an existing one), learn the five simple building blocks that make up the basis of Twilio, and start building voice applications right away.

Today every VC firm in the world is looking to invest in cloud software companies like Twilio. But at the time BVP made this investment, it wasn’t so obvious. I recommend reading the entire memo, but here are my key takeaways on what makes a successful startup investment:

  • Serial entrepreneur founder
  • Highly scalable business model
  • Steady revenue growth
  • Strong technology
  • Opportunity to expand offerings

As we know now, BVP’s early bet on Twilio turned out to be a fantastic one. Twilio is one of the reasons that similar enterprise software deals today are raising money at far higher valuations than this company did back in 2009.

2010: BVP Bets on Shopify

In October 2010, Bessemer Venture Partners made a $7 million bet on a young company called Shopify. Today Shopify is publicly-traded and worth a mind-boggling $113 billion. It recently surpassed the Royal Bank of Canada to become Canada’s most valuable company. In other words, this is a deal memo worth paying close attention to.

When BVP invested back in 2010, Shopify was raising money at a $20 million pre-money valuation. The company had an impressive $5.5 million annualized revenue run-rate. And it showed strong organic growth. 

Today, a $20 million valuation for a similar deal would be considered unbelievably cheap. Out of the thousands of deals I’ve seen, only one comes close (and it’s probably my best investment). 

One of the big reasons BVP got such a bargain price is because Shopify is headquartered in Ottawa, Canada. Most venture capitalists are based in Silicon Valley. And they only invest locally. So because BVP was willing to step outside the Bay Area, they got an amazing deal. 

The Shopify deal memo reinforces my belief that for most online startup investors, the best deals are going to be found outside the San Francisco Bay Area (SFBA)

There’s an incredible amount of competition for deals in the SFBA. But outside of it there’s usually not much at all. This is a big reason why I primarily invest outside of the SFBA — I’m more likely to find success. My best angel investments are from Chicago, L.A., Spain, and India. Sure I have some nice investments from the SFBA. But my largest winners are from outside California — I don’t think that’s a coincidence. 

Bessemer’s bet on Shopify will go down as one of the best tech investments of all time. There are also a ton of other valuable nuggets to be found in the full deal memo.

If you’re a new startup investor (or an old pro), I can’t emphasize enough how valuable these deal memos are. Now go read them! You’ll learn a lot.

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The New Way to Generate Wealth

Note: A few weeks ago, we welcomed John Fanning to the Early Investing family. Today, we’re pleased to bring you his second column. If you’re not familiar with John, he’s worth getting to know. He was the founding chairman and CEO of napster. He has an impressive track record as both a founder and startup investor. And he’s one of the sharpest minds in the space. — Vin Narayanan, Vice President, Early Investing


Wealth inequality in America is no secret. The rich get richer, the poor get poorer, and the middle class continues to shrink. 

Why is this happening? Historically, stock ownership was the greatest wealth equalizer.  But it’s become less effective at generating wealth because of government regulation.

I’m not talking about the regulations imposed on large corporations in order to promote competition or preserve the environment. That’s not the issue here.

The big problems are the regulations adopted in the early 2000s . They’ve made it very inconvenient for companies to go public. And they’ve made it virtually impossible for small, early stage companies to file for an IPO.

For investors, this is a serious problem. Early stage startup investments are where the highest potential returns can be found — in companies whose greatest years of growth are still ahead of them. 

Take Amazon for example. When it went public in 1997, it was worth $438 million. But there’s no way that Amazon (or most other companies) would go public with a valuation that low today.  If it were going public now, Amazon would have likely waited until it was worth at least $1 billion (and perhaps a lot more)! And stock market investors would have missed out on a significant chunk of Amazon’s growth.

That’s because Congress and the SEC over-reached in their attempts to curtail risk in the wake of housing market woes, the 2008 financial crisis, the dot-com bubble bursting and the high-profile bankruptcies of a few supposedly blue-chip companies.

One of the prime culprits is the Sarbanes Oxley Act. It requires companies filing for an IPO to hire expensive third party auditors, investor relations committees and accounting oversight committees to prepare and approve financial reports.These reports are too expensive for early stage companies to produce. 

The result is that early stage companies are staying privately held for longer. In 2001, the average age of a technology company going public was 3 years. In 2018, it was 13 years. By the time companies go public and can be traded in the stock markets, their periods of high growth are far behind them.

High returns come from high growth. So the older the company you invest in, the lower your potential for high returns. Unfortunately, most of the companies on the NASDAQ or NYSE are these mature, later-stage companies.

The irony of all this is that these government regulations were designed to shield middle class Americans from losing their money. But in doing so, the government also shielded middle class Americans from gaining money. These regulations created a system that makes it easy for the rich to get richer through access to private markets, while denying those of lesser means the access to lucrative investment vehicles. 

Now, the only way for Americans to win big lies in investing in early-stage companies in the private markets. Until recently, that opportunity was reserved for the wealthiest and most well-connected of our society.

But thanks to the 2012 JOBS Act, regular investors can now invest in early stage companies while they’re still private. It’s the great equalizer that the government took away in the first decade of this century. 

Investors again have the chance to invest in the next Amazon, Google or Uber while they’re still private — and growing. And that can lead to real wealth generation.

But it’s taken years for us to get here. And in the meantime, those government regulations only increased the wealth inequality. The next time government officials impose a regulation, maybe they should consider the unintended consequences: who are they really hurting, and who are they really helping?


For more of his thoughts on building wealth through private market investing, follow John on Twitter, and LinkedIn, or visit his website: www.john.fanning.com

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Where the Best Deals Are

Just after the COVID-19 lockdown began, startup deals slowed to a crawl. And they stayed at that pace for a few weeks.

Now, things are roaring back. Many new early-stage investment funds have formed over the last few months. Competition for “hot” deals is crazier than I’ve ever seen it. And somehow, valuations seem even higher than they were pre-crisis.

We’ve clearly reached a speculative phase in the  markets at large. And that’s leaking over from stocks into startups.

My plan for startup investing during this crazy market is simple. I’m mostly avoiding deals from the San Francisco Bay Area (SFBA). Investors in the SFBA are bidding up seed-stage rounds to crazy price levels ($30 million is not uncommon today!). There are just so many VCs and angels in one small area, all competing for the same hot deals.

The valuations are much more reasonable once you leave Silicon Valley. For a similar deal, you’re looking at least a 100% price decrease outside the SFBA. That’s why I’m looking for investments from the rest of America — and Canada — where valuations are still sane. 

For what it’s worth, I don’t think these bubbly valuations in the SFBA will last too long — maybe a year or so. It’s even possible they already peaked. 

But until valuations calm down, I’m being very selective about the deals I invest in. When you invest at a $30 million valuation versus a (more typical) seed valuation of $5 million, it makes it VERY hard to make money in the long term. So my advice is simple: be picky, avoid the hot deal frenzy and look for great traction!

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The Best Startups ‘Cheat’

I love cheaters. In fact, I only invest in startups that “cheat.”

I don’t mean companies that are running scams or lying about their services. No, I mean the startups that redefine — that cheat — the game of risk and reward. Companies that can lower risk significantly more than you have any right to expect. Or that can enhance upside way beyond your own projections. Startups that can do that “cheat” a system that says you have to accept more risk to get more upside.

These startups break the mold. And make no mistake, the mold is very hard to break. The vast majority of companies offer investors high risk and high reward. Or they offer the safer alternative — low risk and low reward. 

It’s what I was talking to you about last week when I said that the traditional risk-reward trade-off doesn’t work for startup investing.

But the startups that manage to do it differently… Those are the ones I look for.

I love these cheating companies — and their cheating founders — for their sheer audacity. They dare to limit risk while not sacrificing upside. Or they take delight in amping upside while keeping risk in check.  And they do it legally! They’re not breaking laws. And they’re even not cutting corners. 

But the cheaters I love most of all? The ones that cheat on both risk and reward. It’s hard enough to do just one. Cheating both is a very rare trick. But it has been done! I know. I’ve recommended a few of these brilliant cheaters to First Stage Investor members

It’s why I recommended 20/20 GeneSystems (now raising on SeedInvest). 20/20 helps people detect various cancers at a very early stage. That’s key. It’s when their chances of fighting the cancer off is at its highest. 

20/20 doesn’t offer a cure. But it does offer the next best thing: A way to ameliorate the worst outcomes of cancer. Wouldn’t it be great if every patient could detect their cancer very early and start treatment when it’s most effective?  

20/20’s high upside doesn’t need to be amped. It’s clearly apparent. But 20/20 gives it an extra boost by making its tests surprisingly affordable. The price is low enough that insurance coverage isn’t even needed as a prerequisite for mass adoption.

But what about the tech risk? Cancer breakthroughs occur rarely because the technology often falls short. But 20/20 avoided technology risk by using tests that are already taken by hundreds of thousands of people per year in several Asian countries. They’re so popular because they work. And 20/20 made them work even better by adding AI. Again, that’s not technically cheating. But it sure feels like it. In a sector where tech risk sinks many startups, 20/20 cheated its way to a low risk — and extremely high upside — profile.  

Another cheating company that I couldn’t resist was HyperSciences. I recommended them in 2018. This company took hypervelocity technology that’s been around for decades. Then, HyperSciences simply repurposed it for drilling, mining, tunneling… and (how’s this for nerve?) for aerospace. It can launch payloads and reach near space (100 kilometers high) in seconds. It takes minutes for current rockets to do the same. Hypervelocity tech is established and thoroughly proven. The technology risk is low. The problems it’s solving are huge. The upside is considerable. Yet, HyperSciences made it even bigger by landing a powerful partner in Shell. It almost doesn’t seem fair. HyperSciences is a double-cheater. It has cheated on both its risk and upside. How could I not recommend it?

Here’s one last example: Illusio. It uses augmented reality (AR) to help patients visualize the results of plastic surgery before the surgery takes place. The technology is really cool. (You can check it out on its website.) And it dramatically improves patient satisfaction. 

In a huge and growing market, that’s enough to take away much of the early go-to-market risk. But this company has added two explosive drivers of sales. Surgeons using Illusio’s technology report that surgery booking conversions have nearly doubled… removing even more risk. And it has formed a partnership with a company that supplies products to 85% of surgeons in the U.S. and 50% of plastic surgeons worldwide. Its ability to capture significant market share increases an already high upside.

Double cheaters make the best investments. They’re my top startups. But they’re also few and far in-between. Close behind are the single cheaters — companies with already high upside that do an amazing job at shedding risk. Or those with low-risk profiles that find a way to raise upside to tantalizing levels. 

They make up a majority of my First Stage Investor portfolio. And many of those companies have already doubled and tripled in value. Some have gone up even more. 

I love cheaters. But my affection is not unconditional. I’ve seen cheaters outperform again and again. And that’s all I ask.

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Expanding the Definition of Accredited Investors

This week the SEC expanded its definition of “accredited investor” (AI). Now investment professionals — as well as certain other individuals and groups — can qualify without satisfying the SEC’s income or wealth requirements — $200,000 annual income for the last two years ($300,000 if married) or a $1 million net worth. 

I believe this is just the first round of expansion for the definition. And that within the next five years everyone will be able to qualify as an accredited investor.

But how does this impact existing AIs like you and me? It means more competition in the startup investing world. 

Up until very recently, AIs have had this sweet and lucrative market basically to themselves. In 2016 equity crowdfunding came along and began to crack open the market. Now that the definition of AI is being expanded,  I believe we’re on a path to eventually eliminating the AI requirements altogether. 

Overall, this is a good thing. I don’t believe we should restrict what types of investments people can make in a free country. After all, anyone can legally blow their entire life savings on lottery tickets, stock options or Keno. But more than 90% of Americans still can’t invest in the majority of startup deals. 

Our monopoly on non-regulated startup investing is coming to an end. And I intend to invest in as many promising deals as possible before it does. Because after it’s open to everyone, valuations are almost certain to rise. The more competition there is bidding on a deal, the higher the price will drift.

I suspect we still have a few years of exclusive access to Reg D deals. But those days are numbered. 

Overall, I look forward to a time when everyone is free to invest in the same deals. It’s only fair.

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