By: Matt Emma
We spoke with Harvey Kesner, a seasoned securities attorney and former SEC staffer, who offers his perspective on accredited investor private financing in 2025.
What might sound like Wall Street jargon reserved for hedge funds and institutional investors, private offerings are quietly becoming a central part of the investment landscape – a strategy long embraced by significant institutional funds but also intended for the small individual investor.
Harvey Kesner, a founder of EquiDeFi —the “go-to” private placement software platform for accredited investor offerings —is here to break down what private placements really are, why they matter, and how investors and companies can navigate this complex world with confidence.
So, what exactly is a private placement? Simply put, it’s the way companies raise capital by selling their securities directly to a select group of investors without going through the lengthy and costly process of registering with the SEC. Thanks to exemptions from SEC registration under Regulation D and abbreviated filings for Regulation A+ provided by the Jobs Act, companies can tap into private markets more efficiently than ever. But don’t let the “private” label fool you—these offerings are a big deal, often involving large amounts and providing investors with early access to promising valuations historically only accessed by institutions and venture funds.
Harvey points out that while private placements offer attractive discounts compared to IPO prices, they come with their own set of challenges. “The biggest hurdle is the cumbersome manual workflows,” he explains. “Regulatory hurdles require investors and issuers to deal with manual processes that have not evolved in decades, while online trading in public companies through firms like Interactive Brokers, Schwab, and Robinhood has introduced efficient online and app-based trading platforms”. Kesner points out that lawyers, brokers, and companies still deal with emails, faxes, and scans, working through mountains of compliance paperwork to this day. A Private Placement Memorandum, Subscription Agreement, Financial Statements, and Accredited Investor Questionnaires are basic to transactions like these, unlike trading on online platforms, which occurs with a click. Companies still send documents essentially the same way as 20 years ago. Although tools like DocuSign have made signing electronically easier, communication breakdowns, manual wires, checks, and lost documents can slow offerings, require repeated outreach, and frustrate everyone involved. Later, when shares become free to sell in the open market and the records are not preserved, an investor can miss selling in a run-up.
“The ‘Accredited Investor’ is the linchpin for exempt offerings. Dating back to 1980, the SEC was tasked to create rules for any person based on factors such as financial sophistication, net worth, knowledge, and experience in financial matters, or the amount of assets under management. What passed for “sophistication” in the eyes of the SEC, Kesner adds, “was tagged to verifiable objective criteria such as investor net worth or income”. But changing times and verification are proving harder than ever to justify. “The SEC’s traditional focus on income and net worth leaves out many savvy investors with unconventional assets or income streams, such as gig economy workers. It also injects sensitive subjects into the mix, such as inclusiveness for investors that are culturally or socially disadvantaged along racial or ethnic lines or who do not hold traditional assets or income sources, depriving them of opportunities.” In the 1980s, society was not as sensitive to the effects of the rules, which constituted redlining at that time. Disadvantaged groups couldn’t participate in home ownership, and banks and lenders excluded people from access to mortgages based on zip codes. To Kesner’s point, unlike mortgage redlining, no studies were ever conducted regarding the effects of SEC definitions, and he is calling for legislation to alleviate disparities and expand access. Kesner is at the forefront in urging the SEC to develop new ways to qualify investors using broader data points, helping to level the playing field.
Some of the rules are throwbacks. The SEC is reportedly working to adopt a test that would allow accredited investor status. “Imagine that an investor who owns a $20 million home without current income or other assets,” Kesner points out, “is not accredited” since the value of a primary residence is excluded. In March, the SEC noted that as long as an issuer takes “reasonable steps” to verify accredited investor status, it would not require any specific processes. For example, the staff stated in 2013 that if there is a high minimum investment amount and the purchaser can meet those terms, it may be reasonable to take fewer steps to verify accredited status. Whether an issuer has taken reasonable steps to verify that a purchaser is accredited is an objective determination by the issuer or those acting on its behalf, based on the context of each transaction, says the SEC. In July, the House approved the Equal Opportunity for All Investors Act of 2025, which would direct the SEC to create a test that individuals can take to qualify as an accredited investor, without regard to their wealth or income, which would open up access for more investors – but many financial advisors are wary.
That’s where EquiDeFi’s platform comes in. By automating accredited verification and background compliance checks with solid ties to online payment processing, EquiDeFi is modernizing the private placement ecosystem. Their cloud-based software streamlines everything from investor onboarding to closing, making it easier for companies to raise capital and for investors to participate securely and efficiently.
But platforms like EquiDeFi open the door to thousands of smaller investors who can now easily access deals that were once out of reach online. This democratization aligns with the Congress’s goals under the JOBS Act, which encourages broader participation in private markets.
The private placement market is massive—estimated at $4.45 trillion in 2022 according to PitchBook—and growing. Yet, it has lagged behind public markets in adopting modern technology. Harvey’s vision is to bring this market into the digital age, making it faster, more transparent, and more inclusive.
Take the recent $225 million private placement by Newsmax, for example. Thousands of investors, many with no prior relationship to the company, invested through EquiDeFi’s platform, benefiting from streamlined processes and secure online payments. The result? A successful raise that helped Newsmax avoid the pressures of institutional investors and gave everyday investors a shot at pre-IPO gains.
Of course, private placements aren’t without risks. They are less liquid than public stocks, and regulatory compliance can be complex. But with experts guiding the way—and technology making compliance easier—investors have more tools than ever to navigate these waters confidently.
Disclaimer: The views expressed in this article are those of Harvey Kesner, a seasoned securities attorney, and do not necessarily reflect the opinions of any affiliated entities. The information presented is for general informational purposes only and should not be construed as legal, financial, or investment advice. The article discusses private placements and accredited investor regulations, which involve complex legal and financial considerations. Investing in private placements carries risks, including but not limited to lower liquidity, regulatory hurdles, and potential loss of capital. Readers should consult with a qualified financial advisor or attorney before making any investment decisions. The use of EquiDeFi’s platform and any other private placement tools mentioned is subject to their respective terms and conditions.
