March 12, 2025
Issue: Despite recent reforms, retail investors remain largely excluded from private markets. Currently, an informal SEC position—rather than a formal rule—restricts registered closed-end funds investing more than 15% in private funds to accredited investors only. This effectively blocks most Americans from gaining exposure to high-growth private companies through regulated investment vehicles.
Over the last decade, private companies have been staying private far longer, with the average IPO timeline extending from roughly four to eleven-plus years. Much of the wealth creation in technology now happens pre-IPO. Unfortunately, retail investors are missing out on these growth opportunities—unless they meet accredited thresholds or find roundabout ways to invest.
Enter the Increasing Investor Opportunities Act (IIOA). This legislation aims to:
By removing the 15% ceiling and the accredited-only rule, everyday investors could responsibly tap into diversified portfolios that include private tech companies—no more missing out on the lion's share of early-stage growth.
The IIOA doesn't compromise investor protections. Registered funds remain subject to the Investment Company Act's robust disclosure, governance, and reporting requirements. Professional management ensures diversified exposure, helping mitigate the inherent illiquidity and volatility of private market deals.
By passing the Increasing Investor Opportunities Act, Congress can open private markets to everyday Americans while preserving strong regulatory safeguards. It's time to modernize the rules so we can all participate in the growth of tomorrow's most transformative companies.
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