Brian Nichols is the co-founder of Angel Squad, a community where you’ll learn how to angel invest and get a chance to invest as little as $1k into Hustle Fund's top performing early-stage startups

If you don't meet accredited investor thresholds, you're not completely locked out of startup investing. Several pathways exist with different mechanics, limitations, and suitability for different situations. Understanding your actual options helps you make informed decisions rather than either giving up entirely or proceeding without understanding constraints.

This is the practical explanation of what's actually available for non-accredited startup investors.

Option 1: Regulation Crowdfunding (Reg CF)

Regulation Crowdfunding represents the primary pathway for non-accredited startup investment. Under these rules, companies can raise up to $5 million from public investors through registered platforms, with specific investor protections and limitations built in.

How it works mechanically. Companies register offerings with the SEC and list on crowdfunding platforms like Republic, Wefunder, StartEngine, and others. Investors review opportunities and commit capital through the platform. The platform handles compliance, documentation, and fund collection. Investments typically take the form of equity, SAFEs, or debt instruments.

Investment limits apply based on your finances. If both your annual income and net worth are below $124,000, you can invest the greater of $2,500 or 5% of the lesser of income or net worth annually. If either exceeds $124,000, you can invest up to 10% of the lesser of income or net worth, capped at $124,000 total per year across all Reg CF investments.

Practical example. Someone earning $90,000 with $60,000 net worth could invest up to 5% of $60,000, which equals $3,000 annually. At typical $100-500 minimums per investment, that's roughly 6-30 investments per year depending on check sizes chosen.

Quality considerations. Platforms vary significantly in curation standards. Some maintain meaningful selection criteria while others accept nearly any company willing to pay listing fees. Research platform philosophy before assuming quality screening exists.

As Elizabeth Yin, co-founder and GP of Hustle Fund, explains: "Getting deal flow & education have been the bigger blockers to date" for new investors.

Reg CF addresses the legal access blocker but doesn't solve deal flow quality or education challenges that non-accredited investors still face.

Option 2: Regulation A+ Offerings

Regulation A+ allows companies to raise up to $75 million from public investors with less regulatory burden than traditional IPOs. Some startups use this pathway, creating another option for non-accredited participation.

How it works mechanically. Companies file offering statements with the SEC and, once qualified, can sell securities to public investors. These offerings sometimes appear on crowdfunding platforms but may also be conducted directly by companies or through specialized platforms.

Investment limits are more generous. For Tier 2 offerings (up to $75 million raised), non-accredited investors can invest up to 10% of annual income or net worth, whichever is greater. This typically allows larger participation than Reg CF for most investors.

Practical considerations. Reg A+ offerings are less common than Reg CF for early-stage startups because the regulatory process is more involved. You're more likely to see later-stage companies or those with specific strategic reasons for pursuing this path. The opportunities exist but aren't as abundant as Reg CF listings.

Quality distribution. Companies pursuing Reg A+ have typically demonstrated more traction than typical seed-stage startups since the regulatory effort isn't worthwhile for very early companies. This can mean higher baseline quality but also higher valuations and less upside potential.

As Eric Bahn, co-founder and GP of Hustle Fund, emphasizes: "For beginners, a bigger startup portfolio is better. It helps with diversification and helps you learn and get reps in. Investing requires practice like everything else."

Reg A+ opportunities can provide reps, though the deal flow volume is lower than Reg CF.

Option 3: Investment Clubs and Syndicates With Exemptions

Certain investment structures can include non-accredited investors under specific conditions, though these are less common and come with particular requirements.

How it works mechanically. Investment clubs with limited membership and restrictions on advertising may include non-accredited members under certain exemptions. Some syndicate structures can accommodate non-accredited participants if total non-accredited participation stays within limits. These arrangements require careful legal structuring.

Practical limitations. Finding legitimate opportunities through these structures is challenging. Most syndicates and SPVs require accreditation for simplicity and liability reasons. The arrangements that do accommodate non-accredited investors are relatively rare and require navigating complex compliance requirements.

Quality considerations. When legitimate structures exist, quality depends entirely on the organizers and their deal sourcing. Some may provide excellent access while others may be poorly managed or even fraudulent. Due diligence on the structure and organizers matters as much as due diligence on underlying investments.

Option 4: Employer Equity Programs

If you work for a startup, you may receive equity compensation that provides startup investment exposure without accreditation requirements. This isn't traditional angel investing, but it does provide early-stage exposure.

How it works mechanically. Stock options, restricted stock, or other equity compensation give employees ownership in their employers. These arrangements are regulated under securities laws but don't require investor accreditation since you're receiving compensation rather than making investment.

Practical considerations. This option only applies if you work for startups, which limits its relevance. The concentration risk is significant since your employment and investment are tied to the same company. You have unique information access but also unique biases and constraints.

Diversification challenges. Employer equity typically represents single-company exposure, which violates basic portfolio construction principles. Supplementing with other startup investments becomes more important if significant wealth is tied to employer equity.

As Shiyan Koh, co-founder and GP of Hustle Fund, notes: "Great founders can look like anyone and come from anywhere."

Working for a startup is one way to participate in the ecosystem, but it's fundamentally different from building a diversified angel portfolio.

Evaluating Your Options Honestly

Each pathway has distinct characteristics that suit different situations. Reg CF provides broadest access with lowest barriers but comes with investment limits and variable quality. Reg A+ offers larger limits but fewer opportunities. Investment club structures are rare and require careful vetting. Employer equity provides exposure but lacks diversification.

For most non-accredited investors interested in startup exposure, Reg CF through quality platforms represents the most practical path. It's accessible, regulated, and provides real startup investment experience. The limitations are real but manageable if expectations are calibrated appropriately.

If your goal is serious portfolio construction with institutional-quality deal flow, accreditation opens substantially better options. Angel Squad requires accreditation but provides curated deal flow from Hustle Fund's pipeline of 1,000+ monthly applications, $1,000 minimums enabling diversified portfolio construction, education from active GPs, and community of 2,000+ members. These advantages justify working toward accreditation if startup investing genuinely interests you.

Understanding your options is the first step. Honest assessment of which option fits your goals, constraints, and circumstances determines whether and how to proceed.