The investor relations function takes a different view-point when looking to help companies raise capital from accredited investors. This pool of investors is defined by the government bodies and various from country to country. In the US, the federal securities laws define the term accredited investor in Rule 501 of Regulation D, as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act, as a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase of the securities, or has assets under management of $1 million or above, excluding the value of their primary residence. The same Rule 501 of Regulation D also defines an accredited investor as someone have income of over $200,000 for the past two years, a certain type of trust with over $5 Million is assets, a bank, an insurance company, and other business entities defined by Rule 501.
A investor questionnaire is normally given to a prospective investors along with the Subscription Agreement, Private Placement Memorandum and Business Plan. This investor questionnaire assures the company that the investor falls within one of the definitions of an “accredited investor”. For many companies, this issue is where and how to find accredited investors to present their companies as viable investments.
Cervitude™ Investor Relations helps publicly traded companies and companies looking to go public with Accredited Investor Outreach assuring our clients that their company will be introduced to investment bankers, trust funds, investment funds and family offices that commonly invest in businesses, stocks or securities similar to their company.
Micro Cap Companies, Penny Stocks and OTC traded companies especially benefit from this service understanding that potential investors have already been vetted as accredited. Company clients seeking investment through a private placement reduce needless promotions to investors that are not qualified and can immediately start conversations with investors that are legally able to invest in their business. Need help reaching an accredited investor base? Contact us: