(We originally posted this in 2020. You can read more of our original ideas in our archive.)
Problem: On August 26, 2020, the U.S. Securities and Exchange Commission expanded the definition of an “accredited investor,” to allow people with professional knowledge, experience, or certification to qualify as accredited investors. You can read the SEC’s press release here. With these new laws on accreditation, education takes the forefront rather than wealth (which was the previous barometer). However, it’s extremely difficult to self-study or independently acquire the skills that the SEC describes.
Solution: This business would teach you what you need to know to take the Series 7, 65, and 82 exams to receive the aforementioned licenses. Perhaps the business would go so far as to create an entirely new 1-year (or perhaps multi-week) certification then petition the SEC to have that certification approved as an “Accredited Investor Education Certification.” As written by the SEC:
The amendments to the accredited investor definition in Rule 501(a):
add a new category to the definition that permits natural persons to qualify as accredited investors based on certain professional certifications, designations or credentials or other credentials issued by an accredited educational institution, which the Commission may designate from time to time by order. In conjunction with the adoption of the amendments, the Commission designated by order holders in good standing of the Series 7, Series 65, and Series 82 licenses as qualifying natural persons. This approach provides the Commission with flexibility to reevaluate or add certifications, designations, or credentials in the future. Members of the public may wish to propose for the Commission’s consideration additional certifications, designations or credentials that satisfy the attributes set out in the new rule;
When the press release first came out, there were dozens of Tweet storms about the implications. While there are many changes, a few of them were highlighted in Tweet storms from individuals like Republic Investments and Katherine Wu of Notion Capital. For more on the specifics, I recommend reading this Crunchbase article.
One of the fastest ways to become a billion-dollar business is to own a monopoly in a new industry that has been created by new laws. This business is a perfect example of that concept. By creating a micro-education course for a few thousand dollars, this business would teach individuals how to pass the necessary exams to become accredited investors and push the ball forward to democratize finance and investing for the masses.
This market is huge, as reported by HBR in September 2019:
the new credentialing landscape and its potential deeper integration with talent strategy is also catalyzing the development of new corporate tools, services, and businesses. The educational technology sector continues to experience multi-billion dollar inflows — and the corporate HR technology market is itself catalyzed by approximately $3 billion in annual investment. It is still early in the development of this ecosystem, but the receptivity of business leaders to new educational credential offerings and delivery approaches will be key in defining the future shape of the market.
Monetization: Selling these courses and the certification which allows you to become an accredited investor.
Contributed by: Michael Bervell (Billion Dollar Startup Ideas)