In recent weeks, President Trump has made moves to attract foreign investment to the U.S. His proposed Gold Card would enable international investors to gain legal residency for a $5 million investment. During his Joint Address to Congress, he praised a $200 billion investment from Japan’s SoftBank.

While seeking offshore investment is valid, there’s a significant missed opportunity at home. The accredited investor rule—a guideline that requires individuals to possess a net worth over $1 million or an income above $200,000—excludes many Americans from the most promising investment markets. This must change.

In America, securities are categorized as either public or private. Public securities are available to all investors but have cumbersome regulatory obligations for companies aiming to go public. Conversely, many firms, including Stripe and SpaceX, are opting to remain private.

While private markets reduce regulatory burdens, they restrict access to accredited investors only, effectively barring about 80% of American households from participation. As more businesses choose to stay private, everyday Americans lose opportunities to grow their wealth alongside these enterprises.

Historically, public markets provided a reliable capital source for high-growth companies, benefiting the public by giving them access to top investments. However, the landscape has shifted.

According to SEC Commissioner Hester Peirce, “The once aspirational goal of becoming a public company seems to have lost its luster.” Private markets have been expanding at roughly twice the pace of public equity markets recently.

A critical aspect in this matter is the accredited investor rule—17 CFR § 230.501(a)—an SEC regulation that limits access to private investments. It outlines the criteria necessary for investors to engage in private company offerings, ultimately sidelining millions from promising investment opportunities.

Advocates for this rule argue that individuals lack the knowledge to navigate investments safely, as stated by Patrick Woodall, the director of policy at Americans for Financial Reform: “Knowledge cannot protect people from potential losses… Only financial resources can.”

Contrary to this, we argue that such a protective stance misunderstands the public’s need to engage in investment opportunities that could potentially influence the future, like OpenAI and Anthropic technologies.

The proposed change: Last year, Sen. Tim Scott introduced the Empowering Main Street in America Act (EMSAA), highlighting a test-in basis for accredited investor status.

A test-in approach promotes fairness, allowing any American who passes to invest. It would also democratize access to private markets, enabling broader participation in national economic success.

Yet, Sen. Scott’s bill may be unnecessary; a test-in solution can be enacted by the SEC without new legislation. The SEC possesses existing authority under Sec. 2(a)(15) of the Securities Act of 1933 to amend the rule, allowing for a smoother transformation of private markets. Amending the investor rule should be prioritized immediately.