Making the decision to invest your hard-earned money in Yitto Paws is one we take very seriously. While we’re passionate about Yitto Paws and its future, we understand investing in a startup is an inherently risky business.
After receiving lots of interest from family and friends, we decided to share some basic information about investing in Yitto Paws on our website. Since talking about these kind of investments involves adherence to some federal regulations, we’re going to try to do our best to: (1) define some basic terms, (2) speak like regular people, not legal wonks, and (3) provide people who would like more information a way to express their interest.
U.S. Federal regulations make a distinction between types of investors in order to protect individuals from risking a substantial portion of their assets. Here are how these different types of investors are defined in the United States.
To be considered an accredited investor, one must have a net worth of at least $1,000,000, excluding the value of one’s primary residence, or have income at least $200,000 each year for the last two years (or $300,000 combined income if married) and have the expectation to make the same amount this year. (Source: U.S. Securities and Exchange Commission)
An entity can also be an accredited investor if the organization’s assets exceed $5 million or if its equity owners are accredited investors.
If you do not meet the criteria for an accredited investor, you are then considered a non-accredited investor.
“If you make less than $100,000 per year or your net worth is below that amount, you can invest up to either the greater of $2,000 or the lesser of 5% of your income or net worth. If your annual income and your net worth exceed $100,000, you can invest up to 10% of your income or net worth, whichever is less, up to a total limit of $100,000.” (Source: Investopedia)
For non-accredited investors, Yitto Paws is hoping to open a round of crowdfunding. The tricky thing about crowdfunding is that before launching your project on a platform like Indiegogo or Crowdfunder, campaigns are typically more successful if they (1) have approximately 25% of their project goal committed upfront and (2) set a minimum investment amount of around $1,000.
If you’re interested in being put on our list of potential non-accredited investors to contact when we launch a round of crowdfunding, please use our Non-Accredited Investor Contact Form.
Disclosure: Investing in startups carries a high degree of risk. In general, financial and operating risks confronting both early and developmental-stage companies, as well as more mature expansion-stage companies are significant. Many emerging growth companies go out of businesses every year. It is difficult to know how companies will grow, if at all, or what changes may occur in the market. A loss of an investor’s entire investment is possible and no profit may be realized. Investors are responsible for conducting their own due diligence.