The legalization of General Solicitation of private investments through SEC’s Regulation D, Rule 506(c) has created opportunities for investors and entrepreneurs to connect in a more open and transparent fashion than ever before. What has been historically prohibited, is now specifically enabled with the goal of increasing investment opportunities and access to capital. With that newly created venue comes new requirements for all issuers, investors, and facilitators of the private investment transactions. Issuers of publicly marketed, private securities must now take “reasonable steps” to verify that all investors in their company qualify as Accredited. Self-certification of being an Accredited Investor is not sufficient when investing in Generally Solicited private securities.The SEC offers a non-exclusive list of verification methods that issuers may use, but are not required to use. This non-exclusive list of methods includes the issuer taking “Reasonable Steps” to verify an accredited investor. Tunnel Equity Partners LLC verifies accredited investor status primarily through a 3rd Party provider- EarlyIQ. EarlyIQ provides accredited investors with a private, simple, secure and 100% online process that takes about 10 minutes to complete. Investors are invited to the EarlyIQ verification process via email. Alternatively, investors can provide a verification letter from their CPA, attorney, broker, or registered investment advisor directly to Tunnel Equity Partners to satisfy this SEC requirement.
