This is a small tweak, a paperwork change, not a revolution or a back door to circumvent securities regulations. No loopholes, no shortcuts. Just a bit less friction for accredited investors.

Rise Capital Investments

Why It's Not a Big Deal Despite the Hype

Some people are acting like 506(c) deals just opened up to unaccredited investors.

They didn’t.

Others think this means accredited entities only need $1M in assets now.

They don’t. It’s still $5M.

So what actually changed?

I'm not actually a lawyer, and even if I was, I'm still not YOUR lawyer. So this is my lay person disclaimer to explain the changes to another lay person. Your professional will guide you in your specific situation.

But here goes...

Are You an Accredited Investor? Prove it

This rule only tweaks the verification process for accredited investors.

💡 If an investor contributes $200K (individual) or $1M (entity) and provides a written statement confirming their accredited status, that’s now considered “reasonable steps” for verification.

That’s it. Nothing else changes.

Verification of Accredited Investor Status

In a 506(b) syndication that allows up to 35 unaccredited investors and their family members, to keep that number in check, accredited investors must self-certify that they are indeed accredited. In a 506(c) that allows accredited investors only, accreditation must be certified by a third party such as a CPA or reporting service.

This change now allows accredited investors in 506(c) funds to self-certify similarly to how they self-certify in a 506(b).

What This Does NOT Mean

❌ Unaccredited investors still cannot invest in 506(c) deals. 506(c) offerings remain exclusively for accredited investors. The general public still doesn’t have access to these opportunities.

❌ Accredited entities still need $5M in assets (unless all members are accredited individuals). Despite rumors, the SEC didn’t lower this threshold. Only certain entities benefit from the streamlined verification process.

❌ Sponsors and fund managers still have to verify investor accreditation. However, instead of requiring third-party verification letters (CPA, attorney, bank, or income/tax documentation), large investors can now self-certify their accreditation.

That’s it. A minor tweak, not a massive overhaul.

What Is an Accredited Investor? And Why Should You Care?

To understand why this matters, let’s take a step back.

An accredited investor is someone who meets the SEC’s requirements for investing in private securities. These standards exist to ensure that only financially sophisticated investors with enough capital (and risk tolerance) participate in deals that lack the investor protections of public markets.

As of now, you qualify as an accredited investor if you meet one of these criteria:

🔹 Income Requirement:

• Earned $200,000+ as an individual (or $300,000+ as a couple) in the past two years with a reasonable expectation of earning the same this year.

🔹 Net Worth Requirement:

• Have a net worth of $1 million+ (excluding your primary residence).

🔹 Entity Accreditation:

• A business, trust, or organization with $5 million+ in assets OR where all equity owners are accredited individuals.

🔹 Professional Qualifications:

• Certain financial professionals (like investment advisors) may qualify based on their experience.

Why This Sorta Matters (But Not That Much)

🔹 If you’re raising capital, this makes verification slightly easier for big investors. This can remove some of the friction of onboarding new investors, which is especially important for large check writers to fund quickly.

It's especially useful for funds with high minimums, often $250k plus, to do away with outside verification requirements for all investors in the fund.

🔹 If you’re investing, it doesn’t change who qualifies—just the paperwork process depending on how much you invest.

If you are accredited, you still have access to 506(c) funds at the typical lower minimums of $25-75k (our fund is $50k) if you provide a traditional third-party letter of proof.

Where Can You Get an Accredited Investor Verification Letter?

Obtaining an accredited investor verification letter is a crucial step for individuals seeking to participate in a wider variety of private securities offerings.

An attorney or Certified Public Accountant (CPA) is the easiest route, (they just write the letter and send it straight to you, then you upload to the investor portal).

However, some professionals may be hesitant due to unfamiliarity with the regulations or concerns about their liability. In that case, you might want to find a new one more experienced in private investments is advisable. Matching professional advice with your specific goals is crucial: find the right specialists.

We don't endorse any particular platform, although we do use the first option in our investor portal. Most charge a small fee under $200. The last two are free, but may not be as widely accepted.

• Accredd.com

• Verify Investor

• EarlyIQ

• North Capital

• Parallel Markets

• Accredited.AM

How Long Is It Good For?

✅ Letters are valid up to 90 days from the issue date for new investments. After that, you need a fresh verification.

✅ They're valid Up to 5 years for an investment you’re already in—meaning you don’t need to re-verify while you hold a position in a deal.

If you're in a deal longer than 5 years and somehow no longer qualify as accredited, you don’t get kicked out, but it could impact your ability to reinvest in future opportunities. Some funds may require ongoing verification, but most syndications don’t.

Do You Need a New Letter for Every Syndication?

You might need a new letter for every syndication, but you might be able to reuse it in that 90-day period. It depends on the sponsor. Some will accept a recent verification letter from a trusted service, while others require you to go through the process each time. If you're investing regularly, it’s worth getting a fresh letter every few months so you’re always ready to go.

It's the liability of the syndicator to make reasonable efforts to ascertain investor accreditation, so some are more strict and careful than others.

And remember: I’m not a lawyer. This is general guidance, not legal advice. Always check with a pro before making investment moves.

The Bottom Line

This is a small tweak, a paperwork change, not a revolution or a back door to circumvent securities regulations on accredited investors. There is no loophole, stop trying to find one! Even if you did, this is not an area to get creative: they'll close it down with you inside!

So y'all, let's all calm down.