They probably were using “start up” wrong but there’s no police force hunting down people who lied about being non-accredited investors. You just have to sign a standard form that says you’re an accredited investor and it basically just means you can’t sue anyone if you lose your money.
If a company fails, they might still have some value. In the medical company example I used, maybe they fail Phase III safety trials and don’t get approved. So, they sell all their laptops and beakers or whatever. You don’t get to sue anyone for shenanigans1 if you lied about being an accredited investor.
1 Shenanigans is not a legal term but don’t invest in risky start ups with founders you don’t know if you aren’t able to absorb the loss
They probably were using “start up” wrong but there’s no police force hunting down people who lied about being non-accredited investors. You just have to sign a standard form that says you’re an accredited investor and it basically just means you can’t sue anyone if you lose your money.
If a company fails, they might still have some value. In the medical company example I used, maybe they fail Phase III safety trials and don’t get approved. So, they sell all their laptops and beakers or whatever. You don’t get to sue anyone for shenanigans1 if you lied about being an accredited investor.
1 Shenanigans is not a legal term but don’t invest in risky start ups with founders you don’t know if you aren’t able to absorb the loss