Here's what the new SEC accredited investor definition means for potential Houston VCs

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The SEC expanded its definition of accredited investors, so now is the time for potential venture capitalists and angels to step up. Pexels

This month. the Security and Exchange Commission, or SEC, modified the definition of "accredited investor," with the effect of dramatically increasing the number of people eligible to participate in non-publicly traded investments.

The SEC definition of accredited investor establishes requirements for who may invest in private deals, startups, and private funds. These rules are meant to protect individuals from investing in assets that are high risk and have little publicly accessible information.

Historically, accredited investor status was limited to those that met certain wealth or income thresholds — specifically, a net worth of $1 million excluding primary residence, or $200,000 in annual income for an individual or $300,000 combined annual income for married couples. The SEC's thinking was that higher net worth individuals or higher earners likely have the sophistication to evaluate the risks and the ability to financially withstand potentially losing money they invested in a private investment.

However, with fewer companies going public and an increased interest in participating in private deals, startups, and funds many have suggested the accredited investor rule appeared more and more antiquated.

The SEC's new definition adds individuals with certain professional certifications (Series 7, Series 65, or Series 82 license) and "knowledgeable employees" at private funds, regardless of an individual's level of wealth or income.

Now, individuals with heavy involvement in and responsibility for investment activities and those with financial certifications are assumed to have the financial sophistication and ability to assess the risks of private investments. The SEC also added the clients and employees of family offices, which are investment arms of high net worth families. In addition, the SEC also expanded the married couples' income calculation to include "spousal equivalent" to capture non-married couples.

It remains to be seen whether these additions to the definition of accredited investors will add a significant number of new angel investors, as many of the individuals with such certifications already meet the previous net worth or income requirements. The startup ecosystem, however, has welcomed the move away from wealth and income criteria, as a good first step toward opening the private offering markets to more qualified individuals.

If you now find yourself meeting any of these qualifications of accredited investor, what now? The Houston Angel Network is a great resource to help you navigate these new waters, by providing a framework and network to learn how to evaluate investment opportunities. A common rule of thumb is that nine out of ten startups fail and will return zero dollars to investors. It is prudent to invest in several startups or through a fund with experienced and capable managers to get the needed diversification to expect a return on your investment in this asset class.

Angel networks throughout the country exist to educate accredited investors and provide a network of sophisticated and experienced individuals across industries to support due diligence. By working together and learning from experienced investors, newly accredited investors can avoid common investment mistakes and can develop skills to evaluate non-public investment opportunities.

The upshot of the expansion of accredited investors is that the SEC still expects such investors to be sophisticated and well educated about investment opportunities with high risks and rewards. Investors new to non-public markets should consider joining a network like the Houston Angel Network, where they can see hundreds of startups a year and learn from experienced investors.

Additionally, new accredited investors can engage in the local startup community by volunteering their services as a mentor at a local startup development organization like the Ion, Rice Alliance, Capital Factory, Mass Challenge, Plug and Play and many more. If you are considering investing in startups or a fund, please reach out to us at the Houston Angel Network for more ways to get involved and learn.

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Stephanie Campbell is managing director of Houston Angel Network and co-founder of The Artemis Fund.

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Houston doctor wins NIH grant to test virtual reality for ICU delirium

Virtual healing

Think of it like a reverse version of The Matrix. A person wakes up in a hospital bed and gets plugged into a virtual reality game world in order to heal.

While it may sound far-fetched, Dr. Hina Faisal, a Houston Methodist critical care specialist in the Department of Surgery, was recently awarded a $242,000 grant from the National Institute of Health to test the effects of VR games on patients coming out of major surgery in the intensive care unit (ICU).

The five-year study will focus on older patients using mental stimulation techniques to reduce incidences of delirium. The award comes courtesy of the National Institute on Aging K76 Paul B. Beeson Emerging Leaders Career Development Award in Aging.

“As the population of older adults continues to grow, the need for effective, scalable interventions to prevent postoperative complications like delirium is more important than ever,” Faisal said in a news release.

ICU delirium is a serious condition that can lead to major complications and even death. Roughly 87 percent of patients who undergo major surgery involving intubation will experience some form of delirium coming out of anesthesia. Causes can range from infection to drug reactions. While many cases are mild, prolonged ICU delirium may prevent a patient from following medical advice or even cause them to hurt themselves.

Using VR games to treat delirium is a rapidly emerging and exciting branch of medicine. Studies show that VR games can help promote mental activity, memory and cognitive function. However, the full benefits are currently unknown as studies have been hampered by small patient populations.

Faisal believes that half of all ICU delirium cases are preventable through VR treatment. Currently, a general lack of knowledge and resources has been holding back the advancement of the treatment.

Hopefully, the work of Faisal in one of the busiest medical cities in the world can alleviate that problem as she spends the next half-decade plugging patients into games to aid in their healing.

New accelerator joins the Ion and more Houston innovation news to know

Trending News

Editor's note: The Houston innovation scene is buzzing with big news this month, from a new accelerator joining the fold at the Ion to pre-IPO funding and national expansion plans. Below are the five most-read InnovationMap stories from Feb. 1-15, 2026:

New accelerator for AI startups to launch at Houston's Ion this spring

The new AI Native Dual-Use Sports, Health & Wellness Accelerator is expected to launch in March. Photo courtesy of the Ion

The Collectiv Foundation and Rice University have established a sports, health and wellness startup accelerator at the Ion District’s Collectiv, a sports-focused venture capital platform. The AI Native Dual-Use Sports, Health & Wellness Accelerator is scheduled to formally launch in March. Continue reading.

10+ can't-miss Houston business and innovation events in February

From recurring monthly favorites to the return of annual celebrations and summits, here's what not to miss in February. Photo courtesy the Ion.

February may be a short month, but its event calendar isn’t. From recurring monthly favorites to the return of annual celebrations and summits, here are the Houston business and innovation events not to miss — and how to register. Continue reading.

Houston lab-test startup seeks $1M for nationwide expansion

Jim Gebhart, founder and CEO of TheLabCafe.com. Courtesy photo.

Health care industry veteran Jim Gebhart knew there had to be a better way for patients to access lab services, especially those with high health insurance deductibles or no insurance at all. Continue reading.

Houston wearable biosensing company closes $13M pre-IPO round

Wellysis is known for its continuous ECG/EKG monitor with AI reporting, known as the S-Patch. Photo via wellysis.com.

Wellysis, a Seoul, South Korea-headquartered wearable biosensing company with its U.S. subsidiary based in Houston, has closed a $13.5 million pre-IPO funding round and plans to expand its Texas operations. Continue reading. Continue reading.

Texas booms as No. 3 best state to start a business right now

Texas is rebounding in a report of the best states to start a business. Photo via Getty Images

High employment growth and advantageous entrepreneurship rates have led Texas into a triumphant No. 3 spot in WalletHub's ranking of "Best and Worst States to Start a Business" for 2026. Continue reading.

Houston scientists develop breakthrough AI-driven process to design, decode genetic circuits

biotech breakthrough

Researchers at Rice University have developed an innovative process that uses artificial intelligence to better understand complex genetic circuits.

A study, published in the journal Nature, shows how the new technique, known as “Combining Long- and Short-range Sequencing to Investigate Genetic Complexity,” or CLASSIC, can generate and test millions of DNA designs at the same time, which, according to Rice.

The work was led by Rice’s Caleb Bashor, deputy director for the Rice Synthetic Biology Institute and member of the Ken Kennedy Institute. Bashor has been working with Kshitij Rai and Ronan O’Connell, co-first authors on the study, on the CLASSIC for over four years, according to a news release.

“Our work is the first demonstration that you can use AI for designing these circuits,” Bashor said in the release.

Genetic circuits program cells to perform specific functions. Finding the circuit that matches a desired function or performance "can be like looking for a needle in a haystack," Bashor explained. This work looked to find a solution to this long-standing challenge in synthetic biology.

First, the team developed a library of proof-of-concept genetic circuits. It then pooled the circuits and inserted them into human cells. Next, they used long-read and short-read DNA sequencing to create "a master map" that linked each circuit to how it performed.

The data was then used to train AI and machine learning models to analyze circuits and make accurate predictions for how untested circuits might perform.

“We end up with measurements for a lot of the possible designs but not all of them, and that is where building the (machine learning) model comes in,” O’Connell explained in the release. “We use the data to train a model that can understand this landscape and predict things we were not able to generate data on.”

Ultimately, the researchers believe the circuit characterization and AI-driven understanding can speed up synthetic biology, lead to faster development of biotechnology and potentially support more cell-based therapy breakthroughs by shedding new light on how gene circuits behave, according to Rice.

“We think AI/ML-driven design is the future of synthetic biology,” Bashor added in the release. “As we collect more data using CLASSIC, we can train more complex models to make predictions for how to design even more sophisticated and useful cellular biotechnology.”

The team at Rice also worked with Pankaj Mehta’s group in the department of physics at Boston University and Todd Treangen’s group in Rice’s computer science department. Research was supported by the National Institutes of Health, Office of Naval Research, the Robert J. Kleberg Jr. and Helen C. Kleberg Foundation, the American Heart Association, National Library of Medicine, the National Science Foundation, Rice’s Ken Kennedy Institute and the Rice Institute of Synthetic Biology.

James Collins, a biomedical engineer at MIT who helped establish synthetic biology as a field, added that CLASSIC is a new, defining milestone.

“Twenty-five years ago, those early circuits showed that we could program living cells, but they were built one at a time, each requiring months of tuning,” said Collins, who was one of the inventors of the toggle switch. “Bashor and colleagues have now delivered a transformative leap: CLASSIC brings high-throughput engineering to gene circuit design, allowing exploration of combinatorial spaces that were previously out of reach. Their platform doesn’t just accelerate the design-build-test-learn cycle; it redefines its scale, marking a new era of data-driven synthetic biology.”

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