Sophisticated investment rules are f**king stupid.

If you’re not a “sophisticated investor” - that is, if you don’t meet Australia’s sophisticated investor test, which requires investors to have $2.5 million in net assets or $250,000 in annual income - you’re not allowed to invest in startups.

You can take your hard-earned money and blow it indiscriminately on bad property investments in shitty off-the-plan apartments, pokie machines, or whatever the latest crypto-fantasy trend is, from NFTs to memecurrencies, or even memestocks pumped up on Reddit. But you can’t invest in tech companies founded by folks you believe in, with ideas you’re passionate about.

And that’s fucking stupid.

At face value, the regulations are designed to protect people from risky investments. But in practice, they’re designed to keep the money where the powers that be want it. In gambling. In property. And in the ASX. None of that serves the makers and entrepreneurs who are driven every single day to create Australia’s future economy. None of that serves the dreamers whose companies have the potential to change the world.

It also rules out marginalised people from being a part of the tech ecosystem.

As a marginalised person - a transgender woman in the tech and startup ecosystem - I am incredibly fortunate to be in a position where I can invest in tech companies. But the vast majority of people who don’t fit the pattern of traditional wealth - people who aren’t cis straight white men who come from money - are going to be excluded from building wealth by building equity in tech.

And when that happens…we also exclude valuable voices in the ecosystem in the form of seasoned and experienced folks with a wealth of knowledge who could play a huge part in shaping where we go next.

Right now, folks like Startmate and AirTree are making strides towards changing the game and allowing more investors into the world of startups. And that’s awesome. But we also need regulatory change, and we need to accept that the future cannot be overruled by traditional and incumbent industries and perceptions.

If you want to learn more, there’s an excellent piece by the always brilliant Cara Waters that came out today and got me thinking about the topic all over again:

‘A real turning point’: Novice investors chase startup unicorns

And a huge shout out to Lauren Capelin for being a supporter of marginalised investors in tech.