What is Angel Funding?
Angel investors are high-net-worth individuals who invest in early-stage companies. Angel investors provide cash to young companies in exchange for equity (typically in the form of preferred stock). Many angel investors are members of angel groups like Women’s Capital Connection and Mid-America Angels in our region. These networks allow the angels to increase their access to investment opportunities and diversify their investment portfolio.
At the Women's Capital Connection, we believe personal wealth creates community wealth. By leveraging our knowledge, experience and resources we can help other women, and by extension, our entire community.
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Kelly Pruneau (email)
SEC ACCREDITED INVESTOR REQUIREMENTS
On December 21, 2011 the SEC issued a final rule amending the individual net worth standard in the definition of an “Accredited Investor.” This rule became effective on February 27, 2012.
The Dodd-Frank Act further required the SEC to review the appropriateness of the Accredited Investor definition and issue additional changes that best implement Congress’ intent. The SEC has completed its review and issued a final rule that clarifies the calculation of net worth.
Final Rule (effective February 27, 2012)
(i) the value of the individual’s primary residence is excluded as an asset;
(ii) the amount of indebtedness secured by the individual’s primary residence, up to the estimated fair market value of the residence, is excluded as a liability;
(iii) the investor must deduct as a liability any debt on the primary residence that exceeds the fair market value of the investor’s primary residence (i.e., the amount by which the mortgage is “underwater”); and
(iv) the investor must deduct as a liability any debt that was incurred in the 60 days prior to the sale of the securities (e.g., a second mortgage or home equity loan), unless such debt was incurred in connection with the purchase of their primary residence.
The definition of an Accredited Investor continues to include any natural person with individual income in excess of $200,000, or joint income with a spouse in excess of $300,000, for each of the last two years, and a reasonable expectation of reaching the same level in the current year (irrespective of their net worth).