Month: December 2014

What Does It Mean To Be An Accredited Investor?

Greg Writer The SEC’s Office of Investor Education and Advocacy is issuing this Investor Bulletin to educate individual investors about what it means to be an “accredited investor.”

What does it mean to be an accredited investor?

Under the federal securities laws, a company or private fund may not offer or sell securities unless the transaction has been registered with the SEC or an exemption from registration is available. Certain securities offerings that are exempt from registration may only be offered to, or purchased by, persons who are accredited investors. One principal purpose of the accredited investor concept is to identify persons who can bear the economic risk of investing in these unregistered securities.

Unlike offerings registered with the SEC in which certain information  is required to be disclosed, companies and private funds, such as a hedge fund or venture capital fund, engaging in these exempt offerings do not have to make prescribed disclosures to accredited investors. These offerings, sometimes referred to as private placements, involve unique risks and you should be aware that you could lose your entire investment.

The SEC recently adopted rules to permit general advertising for certain exempt offerings.

Are you an accredited investor?

An accredited investor, in the context of a natural person, includes anyone who:

  • earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR
  • has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).

On the income test, the person must satisfy the thresholds for the three years consistently either alone or with a spouse, and cannot, for example, satisfy one year based on individual income and the next two years based on joint income with a spouse. The only exception is if a person is married within this period, in which case the person may satisfy the threshold on the basis of joint income for the years during which the person was married and on the basis of individual income for the other years.

In addition, entities such as banks, partnerships, corporations, nonprofits and trusts may be accredited investors. Of the entities that would be considered accredited investors and depending on your circumstances, the following may be relevant to you:

  • any trust, with total assets in excess of $5 million, not formed to specifically purchase the subject securities, whose purchase is directed by a sophisticated person,  or
  • any entity in which all of the equity owners are accredited investors.

In this context, a sophisticated person  means the person must have, or the company or private fund offering the securities reasonably believes that this person has, sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.

How do I calculate my net worth?

To qualify as an accredited investor under the net worth test, you must have a net worth that exceeds $1 million, either alone or with a spouse. If calculating joint net worth with a spouse, it is not necessary that property be held jointly. Calculating net worth involves adding up all your assets and subtracting all your liabilities. The resulting sum is your net worth.

The value of your primary residence is not included in your net worth calculation. In addition, any mortgage or other loan on the residence does not count as a liability up to the fair market value of the residence. If the loan is for more than the fair market value of the residence (i.e., if your mortgage is underwater),  then the loan amount that is over the fair market value counts as a liability under the net worth test.

Further, any increase in the loan amount in the 60 days prior to your purchase of the securities (even if the loan amount does not exceed the value of the residence) will count as a liability as well. The reason for this is to prevent net worth from being artificially inflated through converting home equity into cash or other assets.

The following table sets forth examples of calculations under the net worth test for being an accredited investor:

What if I am no longer an accredited investor?

The rules defining  accredited investor were changed  with the passage of the Dodd-Frank Act to exclude a primary residence from the net worth test. This means that some investors who were accredited investors prior to July 20, 2010 are now not accredited investors. For these investors, any purchase rights, such as preemptive rights or rights of first offer, related to securities that they invested in as accredited investors prior to July 20, 2010 are grandfathered in, provided that certain conditions are met. This means that the investor can still exercise these rights even though the investor may not meet the current definition of accredited investor.

Sharing A $100k Idea @ Joe Polish & Dean Jackson Marketing Event

Get Off Your Lazy Assets!

loral langemeier

There’s a simple wealth management mistake that the majority of people fall prey to.

I’ve worked with thousands of people from all around the world and one of the greatest financial challenges I encounter is lazy assets.

At first glance, having lazy assets might not appear to be a financial problem because “having assets and investments is a good thing, right?”

That’s what most people have been taught to believe. If you save your money for a rain day and live a moderate lifestyle, everything will be ok when you retire. I don’t believe in retirement. I believe in making educated financial decisions that allow you to live your life and generate lasting wealth.

Years ago it was relatively safe to invest money in mutual funds and to rely on pensions, but that is no longer the case. The markets are fickle and your entire life savings can be whipped out by unruly behavior from corporations and CEO’s.

Furthermore, financial advisors have been treated as experts and most people blindly hand over their life savings to these advisors and trust them to call the proper shots. I call this the park-and-pray method because you’re simply parking your money in someone’s lot and praying for a positive return. In my opinion, giving your money to an “expert” to manage without playing an active role in what is actually being done with your money is a huge mistake. I can think of nothing riskier.

To generate true wealth, you have to play an active role in your wealth management. Rather than focusing on the money you don’t have (and the debt you’ve accumulated), it’s time to start focusing on the money you do have.

When you learn to manage the assets and wealth that you currently have, your wealth will begin to multiply in ways you never imagined.

You can learn more about my wealth cycle at

To Your Success,

Loral Langemeier

Winning Over Investors With Analytics

Riccardo Caruso

Big data and marketing automation have brought a lot of attention to marketing analytics recently. Industry data shows that companies leveraging analytics perform stronger. Firms are projecting to increase spending on analytics by 72% in the next 3 years (in Feb 2014 companies spent 7.2% of their marketing budget in analytics).

At the same time, marketing budgets have seen drastic cuts. For instance, the marketing budget of mid-size companies (100-500 M$ in annual revenues) went from 10.6% to 6.6% of firm revenues in the past 2 and half years. This is because companies have been struggling at implementing analytics right.

Good news are that CMO optimism in the US economy is at a historic high: from 15% to 54% in the last year.Although these stats were collected from a different class of business, as in comparison to entrepreneurs and start-ups, the data and mindset is what investors love.  As an entrepreneur if you can prove to an investor you know your metrics and analytics that will carry some heavy weight when raising money.

Here are the 3 key recommendations to win with analytics.

  • Talent before tools – If tools are attractive because they can automate and scale up operations, remember that tools are only as good as the people who run them. Focus on right talent first.
  • Embrace a culture of analytics – About 33% of companies are leveraging analytics for decision-making and are able to demonstrate the value of marketing.
  • Plan SMART– Based on my experience, 80% of companies lack specific objectives when it comes to marketing planning. When connecting the dots from the top to the bottom of the funnel, this translates into lack of specific objectives and clear understanding of the conversion paths that generate sales. Make sure your objectives are SMART, Specific Measurable Attainable Relevant and Time bound.

Follow these recommendations and your company will be in the right place to dominate the marketplace, gain confidence with investors and give you what you need to be successful. For specific executable marketing coaching visit


Nine Lies of Sales and Marketing

Perry MarshallLie #1: ‘Make more phone calls today than you did yesterday.’

If making phone calls really, actually works for you, then I suppose you should make more of them. But most of the time, as I explain in ‘Guerilla Marketing for Hi-Tech Sales People,’ the phone calls aren’t really working that well in the first place. And doing more of what already isn’t working is just dumb. Plus, unsolicited phone calls just annoy people.

Today when you hear a motivational speaker getting sales people all revved up to go make phone calls and endure rejection, picture this in your mind: 1000 soldiers with sticks and rocks in hand charge valiantly onto a battlefield, where they are cut down with machine guns, tanks and artillery fire – dying in droves.
Actually a tiny handful of extraordinary, talented warriors will survive by strength, testosterone and wit. But the odds are heavily tilted against them. Only the very, very best even survive, much less prosper.

If your only weapon in sales is your telephone and your ability to withstand rejection, you’re fighting tanks with sticks. And as the 21st century unfolds, the problem’s going to get worse, not better.

Think about this: about 30 years ago, factory workers began to be displaced by machines and cheap foreign labor. The worker cost $12 per hour but the robot only cost $2.50 per hour.

Anyone willing to work for $2.50 per hour?

Lots of sales people are doing just that.

Today, sales people are being displaced by websites and media. Imagine for a moment that you were a door to door book salesman today (they were quite common 100 years ago) — how would you ever compete with Amazon, or a bookstore like Borders or Barnes & Noble?

Impossible. You’d starve to death. And you couldn’t possibly provide your customers a similar level of service or selection.

A person selling books door to door is only slightly different from somebody who sells insurance or telecommunications or any number of other products and services today.
But here’s the TRUTH: IF you carve out a niche for yourself (I’ll cover that in installment #3 and #9) and IF you use automated tools like your website and direct mail, you CAN increase the efficiency of your business and you CAN compete.

And you won’t antagonize your customers in the process and you won’t need those big doses of motivation.

Listen up: You MUST carve out a niche, and you MUST use your communication tools shrewdly.

Most companies don’t. Most websites are designed with no particular purpose in mind. Most companies don’t have any idea how to create a direct mail piece that makes the phone ring. (That’s why they think direct mail doesn’t work.)

BOTTOM LINE: 1) You MUST have marketing tools that do the grunt work for you. 2) You must tweak those tools until they’re effective.
Often you’ll try something and it doesn’t work the first time.

But… the good news is, once it works, it will usually work for YEARS.

That’s why time spent on marketing is absolutely the best time investment you can make – IF you’re educated about what really works and what doesn’t.

In the next issue I’ll attack Lie #2: ‘You’ve just got to get in front of more people.’

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