InvestReady, an industry leading financial technology firm that provides compliance services for both issuers and investors in the private equity market, is launching a first-of-its-kind investor accreditation service, powered by Verix, that can qualify investors in minutes. This revolutionary new service is made possible as a result of Verix’s instant tax return transcript API.
In the US, private security issuance under Reg D (506c) requires proof that the investor is “accredited.” To be accredited, an individual must earn over $200,000 a year or have a net worth of $1 million or more. All platforms that provide Reg D offerings must comply with the rule. And not just once but repeatedly.
Verix’s API allows users to confirm their identity and authorize their IRS tax transcript data to be provided directly to InvestReady, typically within 30 seconds or less of submission. InvestReady’s system uses this data to make a decision on the user’s qualifications instantly, allowing for near real-time evaluations and approval of accredited status.
“The ability to verify users within seconds at scale is a huge step forward for this industry and will open the doors for more issuers to utilize the 506c exemption given that this eliminates the huge barrier of compliance time delays for both issuers and investors,” said Adrian E. Alvarez, CEO and Co-Founder of InvestReady.
And he is correct. Due to the laborious nature of investor verification, many crowdfunding platforms seek to avoid Reg D (506c) and use its sister exemption that requires no verification. But these same platforms lose out on the ability to promote offerings publicly online.
“Our Partnership with InvestReady is a great step forward in our mission to build the future of financial identity verification. Verix offers effectively 100% VOI coverage in the US, real-time data, and deep detail across all income types (W-2, 1099, K-1, and more). InvestReady’s focus on building the best technology offering in their industry fits perfectly with our long term goals and we’re very excited to help power their instant income service,” said Ben Prawdzik, CEO and Co-Founder of Verix.
InvestReady scheduled the roll-out of its instant accreditation offering to coincide with CIS, the leading cryptocurrency and blockchain conference, in Los Angeles later this month.
Many of InvestReady’s existing clients, which include Mercedes-Benz Financial Services, Securitize, KoreConX, LendingHome, AlphaFlow, CrowdEngine, Vertalo, and PrimeTrust, are said to be planning to use the new service.
“As we enter this new Era of on-demand digital real estate investing, the demand for better automation with increased speed to market capabilities is not only desired but one of necessity. InvestReady’s Instant Income service is another big upgrade for the industry in general and will directly improve, not to mention simplify, the investor experience. The industry now has an end-to-end turn-key accreditation service that provides the speed we need, the compliance we require, and low per unit costs. It’s the ultimate trifecta,” said Jimmy Bingham, SVP of Business Development at PrimeTrust.