What the SEC Didn’t Tell You About Who Can Invest

Most people don’t know that venture investing can be done legally in community — if you structure it right.

There’s a misconception in venture capital that you need to be a millionaire or a tech insider to invest. That myth has kept a lot of smart, capable people — especially those from historically underinvested communities — on the sidelines.

Let’s fix that.

First: What’s an Accredited Investor?

According to the SEC, an “accredited investor” is someone who meets one or more criteria that prove you understand the risks — and can take the hit if things go sideways. Here’s how you qualify:

• You’ve made over $200K per year ($300K with a partner) for the last 2 years, OR

• You have over $1M in net worth, excluding your primary home, OR

• You manage a trust or family office with over $5M, OR

• You’re a knowledgeable employee in the investment world, OR

• You represent an entity (LLC, S-corp, etc.) with enough assets

It’s about structure, not status. And that opens the door to something powerful: group investing.

LPs Can Team Up — Legally

Let’s say you’re not an accredited investor (yet). You still have options — especially if you’re in community with someone who is.

Here’s how it could work:

• James is accredited and wants to invest $100K

• Sam, his longtime friend, has $25K but doesn’t qualify individually

• Carol, James’s aunt, has a revocable trust with real estate assets

Together, they form Entity A — a legitimate investment vehicle (LLC, partnership, or trust). James is the point of contact, but everyone benefits.

The SEC cares that:

1. Someone in the group is accredited

2. The entity follows tax and compliance best practices

3. You’re not disguising something shady

That’s it. No yacht club membership required.

Do It Right — Not Risky

This is where many first-time LPs get it wrong. Venture isn’t crypto. You can’t wing it.

Here’s what we tell our early investors:

• Talk to an attorney — for your fund structure and joint entity setup

• Talk to a tax professional — to protect your upside and avoid trouble

• Document everything — even with family and friends

And of course, ask questions. We’re here for those, too.

DVRGNT Ventures Makes It Easier

We offer tools and resources for first-time LPs:

• Webinars on fund mechanics and returns

• Sample documents to structure entities

• Direct connections to trusted legal/tax advisors

• A WhatsApp group for LP education and updates

Because alpha isn’t just for the elite.™ It’s for anyone smart enough to see opportunity — and strategic enough to access it.

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We’d love for you to join the conversation:

For Investors:

What products have you seen gain unexpected momentum because of their cultural cachet, maybe even through a surprising media alignment?

For Founders:

Are you building a product with inherent cachet that’s ready to capture the imagination of tastemakers, especially from The Great 38™? We want to hear from you.

Apply at the link below to learn more about our founder-first approach.

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