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.

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Nov 20, 2025

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:

Someone in the group is accredited
The entity follows tax and compliance best practices
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 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.

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?