Accredited Investor Information for AI Cognitive Ventures LLC

At AI Cognitive Ventures LLC, AIVC, we prioritize providing our investors with the necessary information to make informed decisions. One crucial aspect is understanding the concept of an "accredited investor," a designation that permits individuals and entities to participate in specific unregistered securities offerings.  

Frequently Asked Questions about Investor Accreditation

1. What are securities? What is the SEC? Securities encompass financial instruments, including promissory notes, stocks, bonds, membership interests, options, and other investment contracts. If you invest money in a company's equity or claim its cash flows through debt, you are likely dealing with securities.

The U.S. Securities and Exchange Commission (SEC) is the primary federal agency regulating securities markets. Its mission is to protect investors, maintain fair and efficient markets, and facilitate capital formation. Securities sold in the U.S. must be registered with the SEC or qualify for an exemption, most commonly for sales to "accredited investors."

2. What are the differences between public and private securities? Public securities are traded on national exchanges like the NYSE or Nasdaq, requiring issuers to undergo a registration process and adhere to ongoing reporting obligations. Private securities, however, are not traded on national exchanges and do not have federally mandated reporting requirements, often resulting in lower liquidity. The JOBS Act expanded the avenues for raising capital and increased liquidity options for private securities.

3. How does the SEC achieve its stated objective? The SEC utilizes two primary tools: anti-fraud liability and disclosure requirements.

• Anti-fraud: Regardless of whether a security is public or private, investors and regulators can pursue legal action if an issuer or its representatives engage in fraudulent activities or make misleading statements.

• Disclosure: The SEC mandates varying levels of disclosure depending on the investor group targeted. The broader the investor group and the less sophisticated the investors, the more disclosure is required. Issuers with over 2,000 total investors or a significant number of unaccredited investors must report as public companies.

4. What is the JOBS Act? The Jumpstart Our Business Startups (JOBS) Act, enacted in 2012, revolutionized the securities regulatory framework. It allowed issuers to solicit accredited investors in general and mandated "reasonable steps" to verify investors' accredited status. Failure to comply can have severe consequences.

5. What is an accredited investor? An accredited investor is an individual or entity that can participate in unregistered securities offerings. For individuals, accreditation typically requires:

• An annual income exceeding $200,000 (or $300,000 with a spouse) for the last two years, with expectations of the same in the current year, or

• A net worth exceeding $1 million, excluding the primary residence.

Entities generally qualify if they have over $5 million in total assets or if all owners are accredited investors. 

6. What documentation is required to assert my accredited investor status? Income can be verified through tax returns, W-2s, K-1s, 1099s, or other official tax documents. Net worth requires documentation of assets (such as bank statements and real estate appraisals) and liabilities (via a consumer credit report). All documents must be valid within the last 90 days.

For SEC-approved license accreditation, provide your CRD number. See our license support page for more details.

7. How do I use my real estate holdings to satisfy the net worth test? Real estate assets can be included in net worth calculations with proof of ownership (e.g., mortgage statements, tax assessments) and valuation (e.g., property appraisals). Online estimates (e.g., Zillow) are also acceptable but may be subject to discounting.

8. Can I use crypto assets to verify my accredited investor status? Yes, crypto assets can be included in your net worth calculation. However, ownership must be documented through an institution that provides verifiable account statements. We do not accept assets held in cold wallets or anonymous exchanges.

9. What if I own assets through an LLC or other passthrough entity? Assets owned through entities can count toward accreditation if you can prove your ownership percentage and the entity's liabilities. Could you provide an operating agreement or similar documentation to verify your ownership stake?

10. Can entities be accredited investors? Entities like LLCs, corporations, trusts, or GP-LPs qualify as accredited investors if they have over $5 million in assets or if all equity owners are accredited. Verification can include brokerage statements, real estate appraisals, or bank account documentation.

11. What if I cannot assert my accredited investor status? If you do not meet the criteria for accredited investor status, your investment opportunities in specific securities offerings may be limited.

12. How do you secure my data? We use a three-tier data protection system, leveraging Amazon Web Services (AWS) with ISO/IEC 27001:2013, 27017:2015, and 27018:2014 certifications. Data is encrypted in transit and at rest, using state-of-the-art security measures.

13. Who has access to your servers? Only authorized personnel with role-based access can interact with our server infrastructure. All-access is IP-restricted and requires multi-factor authentication. Amazon manages routine maintenance and security updates.

14. Is my personal data safely transferred? Yes, all personal data is transferred securely using 2,048-bit TLS encryption. This includes highly sensitive information such as identification documents and tax returns.

15. How is my information shared with third parties? Your data, including identification documents and tax returns, will only be shared with third parties if you authorize it.

For more details or if you have any questions, don't hesitate to get in touch with us directly or email us at info@Aicognitiveventures.com