ACCREDITED INVESTORS

Generally speaking, an accredited investor is anyone who has 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). These requirements, set forth by the SEC, help to ensure that investors are financially endowed enough to recover from potential losses with regards to their investments. While CIF will not use crowdfunding in its initial project, we hope to use this system in the future to broaden outreach and participation to non accredited investors.

CROWDFUNDING

What is crowdfunding? Crowdfunding is any method that seeks many investors for a business or project instead of just a few. Many crowdfunding sites seek funding for a quite diverse group of startup companies. Crowdfunding for Opportunity Zone Funds uses the same platform, but investors have to be accredited or rolling over capital gains, and generally leave their investment in a deal for at least 10 years. The crowdfunding site sorts investors in the beginning to be sure they qualify under SEC rules.

Crowdfunding broadens the outreach to potential investors interested in art, culture, and socially minded investments that may not be discovered through the usual “friends and family” model of finding investors.

The current OZF model excludes most non-wealthy investors from participating, so it perpetuates inequities for investors. CIF is actively supporting efforts to revise the IRS interpretative rules to provide more access to people of all income levels.

Eventually we hope to broaden the reach of the crowd funding model to a wide variety of community investors currently rarely included in specific investment models such as the OZF.