The JOBS Act: More And More Angels

William Carleton, Contributing Editor, VCExperts

Puzzling figures – numbers cited as averages - in the angel investing infographic published by VentureBeat (and perhaps others):


The numbers fail to clear either bar set by the accredited investor definition: $200,000 in annual income, or $1 million (of late, not including the value of the principal residence) in net worth.

If the $90,000 figure for average income is to be believed, then the angels in that pool must be exceeding the net worth threshold. But if the average angel net worth is $750,000, then the angels in that pool must be exceeding the $200,000 in annual income (or $300,000 in combination with your spouse) threshold.

Is such math possible?

At least plausible, to me, are the figures the infographic cites in the growth of the numbers of angel investors, and the total dollars invested by angel investors, over a recent ten year period.

At least part of this growth can be attributed to inflation: because the accredited investor thresholds have not been increased in the three decades since first set, the thresholds have, in effect, been decreasing over time, even as the population and the economy expand.

This is a good thing.

Good things don't always last. Under Dodd-Frank, Congress asked the GAO to undertake a study about the accredited investor thresholds; and the recently departed SEC Chair wondered publicly whether the definition should be soon overhauled.

Throw in the JOBS Act's lifting of the ban on general solicitation for Rule 506 offerings limited to accredited investors, and you have a cluster of contradictory indicators. Do we think angel investing is good for America and do we want more of it; or is the pernicious force of inflation surreptitiously and subversively democratizing private financing (regulators seem to congenitally feel that average people have no business financing private business)?

William Carleton

Bill is a member of McNaul Ebel Nawrot & Helgren PLLC, a Seattle law firm. He blogs every day at