The All In Pod & Accreditation Status

For those unfamiliar, the All In podcast is hosted by four tech and investment heavyweights—three billionaires and one lonely centimillionaire (peasant!). They cover markets, politics, AI, and more, mixing insightful takes with the occasional absurdity.

In episode 217, my ears perked up when they started discussing accreditation status for investors. If you’re unfamiliar, being an accredited investor opens you up to countless private market investment opportunities. You can invest as a non-accredited investor but you will have less options.

Quick Refresher on Accreditation:

• Income Test: $200K+ individual income ($300K joint) for two consecutive years with expectations to continue.

• Net Worth Test: $1M+ net worth, excluding a primary residence.

These criteria, set in 1982, once included just 2% of households—now, about 18.5% qualify. SEC Chairman Gary Gensler wants to tighten the rules, arguing that too many people now meet the threshold. Check out these charts below:

Jason Calacanis, the self-proclaimed best podcast host on the planet, thinks accreditation should be based on a knowledge test. At first, I nodded in agreement—wealth alone doesn’t determine financial literacy. There are people worth millions who probably shouldn’t touch private markets and people worth 500k who have the expertise to make an educated decision. 

But then…I started shaking my head.

Jason’s Reasoning:

• “Allowing broader access to private markets will improve upward mobility. This can be done by a knowledge based accreditation test.”

• ”...and if they did understand that, you could take people who are gambling in the stock market and allow them to invest in private market companies”

• “But when you start betting on startups you learn how entrepreneurship works, how product market fit works”

David Friedberg Pushed Back:

• “They should buy the S&P index, proven, scaled audited, profitable, well-vetted, solid fiduciary responsibility with public board companies.”

• “People that are not sophisticated or experienced, they first enter a new market, any market, in this process of adverse selection which is why you have predatory practices, predatory pitches that show up and say, “Invest in this. It’s a great deal”

• “Most people aren't able to vet that thing, and they end up getting taken advantage of, that’s the problem.”

Jason’s comments are kind of hypocritical because startups and venture capital are among the riskiest investments out there and investing in them as a LP won’t really help you learn a business. It’s passive for a reason. 

Also, addressing Jason’s comment that the stock market won’t make someone rich and is “gambling” is not true. Decades of data show low-cost index funds consistently generate solid returns. Buying a few low cost index funds/mutual over any time horizon in the last 20-100 years would yield you some very decent results. “Gambling” would be investing in a startup as an outsider to the industry. 

Imagine someone inheriting or saving up $25K, a potential wealth-building foundation. If they throw it into a startup like Zume (the robotic pizza company that burned through $500M), they might lose everything. That same $25K, invested consistently in the S&P 500, could compound into something very meaningful over time.

Check out this quick analysis below of what someone can achieve by investing $1000 each month into a low cost index fund, by using the average annual return of the S&P 500.

Private investments require deep expertise—I stick to real estate because I understand it. But I wouldn’t touch venture capital, and neither should someone just starting their wealth journey. David points out that these types of inexperienced investors are exactly the ones who 

1. Don’t have access to great deal flow, and therefore won’t know what a good deal looks like.

2. They don’t know what a good deal looks like, so they invest in a bad one, or worse they think that investing in a start-up is a safe place and end up losing money that was essential for their wealth building journey.

I am all for a knowledge test. Like I said, there are people worth 5 million dollars who shouldn’t be investing in private markets, but calling stock market investing gambling? That’s a stretch Jason! 

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