Private equity and venture capital firms scored a quiet win last week when the U.S. House of Representatives passed the Equal Opportunity for All Investors Act by voice vote, advancing a bill that could funnel more everyday investors into opaque, high-risk private markets.
Introduced by Rep. Mike Flood (R-Neb.) and co-sponsored by Reps. Sarah McBride (D-Del.), Cleo Fields (D-La.), and others, the bill directs the Securities and Exchange Commission (SEC) to create an exam that individuals can take to qualify as accredited investors. Passing the test would allow them to invest in hedge funds, venture capital, private equity, and other private securities offerings without needing to meet the current thresholds of $200,000 in annual income or $1 million in net worth. This would give more people access to investments typically reserved for the wealthy, but it could also expose them to markets with fewer safeguards, less transparency, and more risk.
