Bancbox Invest launches investor accreditation service

Bancbox Invest has unveiled an investor accreditation service that it hopes will position it as the premier company for P2P and crowdfunding platforms.

This API-based solution provides the option for companies using Bancbox services to include accreditation services that can assess potential investors by analyzing their income and assets while determining if they are in a legal position to invest.

Bancbox’s investor accreditation service specifically addresses three areas of the process which comply with the SEC’s 506(c) accreditation standard.  The first is income verification.  By looking at two years’ worth of the potential investor’s W-2’s, 1099’s, K-1’s and 1040’s and confirming they expect to comply this year, Bancbox can verify that an individual’s yearly income is $200,000 or that, if filing as a couple, that the yearly income is $300,000.

Beginning this month Bancbox technology will also be able to coordinate third-party income verification. It must be received from a CPA, attorney, SEC-registered investment advisor, broker dealer or equivalent.

In May Bancbox solutions will be able to determine whether or not an investor’s net worth excluding their residence is at least one million dollars.

Bancbox CEO Sanj Goyle highlighted the convenience advantage when discussing the pluses of the new service.

“Clients often struggle with the various verifications required to allow fundraising on their platforms. We wanted to provide a secure and transparent system in order to remove the barriers that companies face in order to comply with SEC regulations.  This way the platforms can focus on their primary business and let us handle the legal component.”

Platforms that utilize Bancbox Invest include: SeedInvest, iFunding, Localstake, Patch of Land, SparkMarket, Community Leader, Gust and Rock the Post.

Bancbox CEO Sank Goyle answered a few questions about the new technology and its users:

Sanj-smallIs it hard to navigate the various regulatory requirements of the different states?

The regulatory requirements of different states is a tedious process to navigate, but it is simply a matter of keeping up to date and informed with the differences and changes.  For example, some states, such as Michigan, require the bank at which the escrow is held to have a branch within the state.

What unique requirements do Private Placement and Debt/Equity crowdfunding platforms have that necessitated their own unique solutions?

Some platforms have different requirements for their fund flows, but Bancbox Invest has the flexibility to support multiple use cases.

Were these changes hard to make?
No, the changes were not hard to make.

One can imagine smaller entities being the ones to jump at having you handle investor accreditation. Are larger ones more likely to go in house, or does the technology make the process so straightforward that they prefer to leave it to you?

We are seeing interest from the smaller, as well as the larger platforms. This added solution allows Bancbox to become a one stop shop for the compliance and escrow needs, as well as this addition of investor accreditation.This convenience is attractive to both the smaller and larger platforms alike.

Real estate and debt equity are two areas that are growing in  popularity.  What are some of the other areas we can expect to see join them in the next couple of years?
We have seen a spiked interest for Clean tech platforms, as well as from Auto platforms.  It will be interesting to see the growth of these industries.

Bancbox CEO Sanj Goyle was interviewed by Bankless Times for a piece late in 2013.  Click here to read that article.

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