Hi {{first_name}},

It’s been twenty-six years since I sat for my Series 7 exam. It was one of the toughest exams I’ve ever prepared for and it was a fulltime, month long effort. And like most exams like this, much of the material isn’t directly applicable.

It let me understand the stock market, full stop. That’s about all it was worth to me at the time. I never thought of it as a backstage pass to private markets.

On September 30, the SEC proposed the widest-reaching push to open up private markets since the accredited investor rule was written back in 1982.

That’s not me being dramatic, either. Read what’s on the table.

The SEC wants to make performance fees easier for registered funds to charge and to modernize the rule for interval funds. It’s also asking five questions. Should a CPA, a CFA or a CFP count as a ticket into private markets? What about a few more FINRA licenses, from the same family as my Series 7? Or an entirely new exam, open to any adult?

Income and net worth be damned.

But the biggest piece of that list is the open exam—it doesn’t exist yet. For now, it’s just a question the SEC is asking. The rest is a variation on something the Commission tried once before. In 2020, it let licensed professionals in, including Series 7 holders.

So I can tell you exactly what that backstage pass is worth. I have the license. It never got me a single deal, and it never paid enough to invest in minimums.

My first real deals came in 2013 and then 2015. I leveraged my network to find founders who were building something based on fundamentals and track record, because I knew private investing is where the real money is made.

That's the whole argument of this week’s issue.

— Walker Deibel
WSJ & USA Today Bestselling Author of Buy Then Build
Founder, Build Wealth

If you're curious about joining us, check out the full deal room here.

Please see disclaimers at the bottom of this email and in the presentation. This email is for educational purposes only, shares personal investing decisions that I've made and why, and includes forward-looking statements. Potential investors should always conduct their own diligence and read the full PPM.

To invest in most private deals, the SEC requires you to be an accredited investor. That typically means one of two tests. Either your income hits $200,000 a year, or $300,000 with a spouse, for the last two years. Or your net worth meets the $1 million threshold, not counting your home.

Those dollar thresholds were set in 1982 and have never been adjusted for inflation. A $200,000 income in 1982 bought far more than it does today. Every year, more people clear the bar on paper, while the bar itself says less about what they know.

So, fast forward to 2026. On September 30, the SEC voted to put two rule changes out for public comment. It’s important to understand their definitions. 

In the process of putting out these two new proposed rules, it also asked the public five questions. Questions to determine what should qualify someone as an accredited investor:

None of it is final, and every piece will be open for comment for 60 days. The credential questions sit a step behind the two rules, at the request-for-comment stage, so any final rule there is further off. In the exam’s case, the test itself still has to be written.

The fee changes reach you first

The credential debate will win the headlines. But the two halves of this proposal do different jobs. The credential questions widen who gets to enter private markets. The fee and fund changes widen who gets to sell what’s inside. That second half is further along, and it’ll reach investors sooner.

Start with interval funds. An interval fund holds assets that are hard to sell quickly, like private loans or real estate. You can’t sell your shares on an exchange the way you would a stock. Instead, the fund offers to buy back a set percentage of its shares at regular intervals, usually quarterly. That lets a manager offer private-market assets to everyday investors without having to promise daily liquidity.

Managers like the format because it opens a huge new pool of buyers. Investors get access to assets that used to require a $250,000 check and an invitation. The proposal would give managers more room to set those buyback schedules and to sell different share classes of the same fund to different investors.

Then add performance fees. A performance fee pays the manager a share of the gains, often around 20%, on top of a flat management fee. Today, advisors can generally charge one only to a “qualified client,” a group that has to clear a higher wealth bar than accredited investors do. The proposal would count accredited investors as qualified clients, and it would make it easier for registered funds to charge performance fees too. 

Put the two together and you have a reason for two groups to move at once. Large private equity firms that have been largely shut out of selling to individuals get a better product to sell. RIAs that couldn’t charge on performance get a new way to get paid.

So expect a wave of new funds pitched as your way into private markets. The menu is about to get longer. Some of it will be good. But a lot will carry higher fees and hold the same deals everyone else is seeing, just repackaged for a wider audience. 

The SEC ran this experiment in 2020

The credential idea isn’t new. In 2020, the SEC let holders of the Series 7, 65 and 82 licenses qualify as accredited investors, with no income or net worth test.

Its adopting release counted about 691,000 registered securities representatives and 17,500 state-registered investment adviser representatives, roughly 700,000 people. The SEC said even that number was likely too high, since it couldn’t tell how many people held more than one license.

It also expected the change to add few new investors. Most people with those licenses work in finance, and many already qualify on income or net worth. The door only got wider on paper. 

The proposed exam would go further

The exam is the hardest part of this proposal to dismiss. It’s the one piece that goes beyond 2020. A Series 7 or 82 requires a broker-dealer to sponsor you, which means you need a job in the industry. An accredited investor exam would be open to any adult willing to study for it.

Picture a young software engineer. They’ve read every issue of this newsletter, understand a capital stack better than many advisors, and earn $150,000 a year. Under today’s rules, they can’t invest in most private deals. Under an exam path, they could. That’s a wider door than anything in the 2020 rule, and a fairer one.

What a test can measure

Now, let’s look at what the exam is meant to prove. Every credential question in the proposal rests on one idea: sophistication should decide who gets in, more than income or net worth alone. A CPA, a CFA or a passed exam is supposed to be evidence of it.

The idea is sound. Sophistication just doesn’t arrive all at once. It builds in stages, over years of writing checks. At Build Wealth we call it the Investor Maturity Curve. It’s three levels, each asking a harder question than the one before.

If you read our most-shared issue, you’ve seen something similar. That issue called the first level ‘access.’ Access gets an investor in the door. Level 1 of the maturity curve is what happens once they've achieved access.

An exam can show someone is ready for Level 1. It lets more people order from the menu. Allocation and architecture come from years of writing checks and living with the results.

Where the deals come from

A credential also leaves the source of the best deals unchanged. Build Wealth calls its approach the Proximity Playbook: invest where information travels slower, back operators you know personally, build an edge through direct access, and be ready to act before an opportunity is obvious to everyone else.

The deals that matter most often never have a public raise to qualify for. They come from relationships built years before anyone asks about accreditation. Proximity is how investors get what’s not on the menu. 

My Best Credential Was a Phone Number

Image: Will Sentance delivering his AI / ML Intensive at Codesmith 

Individuals hold roughly half of the estimated $275 to $295 trillion in global assets under management, according to Bain’s 2023 Global Private Equity Report. But they hold only 16% of the assets in alternative investment funds. Institutions hold the rest.

The capital is already in individual hands. The deal flow was built for institutions. They see the large, marketed, already-vetted opportunities first, and what’s left trickles down to everyone else. That’s the gap the SEC’s credential questions are trying to close.

The smallest, earliest deals never reach an institutional committee at all. They start with a relationship, before a prospectus exists, and they go to whoever is already in the room.

In 2015, my father and I wired $475,000 into Codesmith, a young coding academy in Los Angeles betting it could build the best software engineering program in the country. It was the first serious check I’d ever written for a business I wasn’t running myself. There was no public raise. Instead, I met the two founders, Will Sentance and Alex Zai, and decided to invest in them.

My father and I were the only outside investors.

I had their phone numbers. I used them. Will and I talked often about where the industry was heading. That’s the Proximity Playbook at its simplest.

No credential would have gotten anyone else into this deal, because there was nothing to qualify for. It was never on the menu.

The Test

For years, the bet looked good. Revenue grew from $2.4 million in 2017 to $18.5 million in 2022, and held at $18.3 million in 2023.

Then AI started doing the entry-level coding work Codesmith trained people for. Roughly one in ten coding academies nationally went out of business. Revenue fell to $9.6 million in 2024 and $5 million in 2025. I watched a business I’d backed for almost a decade run straight into the thing that was disrupting its industry.

Will and Alex had seen the next shift coming. They’d been building a curriculum for engineers who get AI working inside a business, a role that now has a name: forward deployed engineer. Codesmith pivoted to training them.

What happened next

We covered the pivot and the pipeline in full in our September issue. Check out the case study. 

Full disclosure: I’m still invested in Codesmith, now through BuildForce, our SPV, so I have a clear point of view here.

Proximity paid off twice. In 2015, it got me into a deal nobody else could see. A decade later, it let me hold with conviction while the category collapsed around the company, because I could call the founders and hear the plan myself.

No pension fund flies out to sit across the table from two founders with an idea. That kind of access only exists at relationship scale. 

If the fee and fund changes in this SEC proposal go through, a wave of new funds will market themselves as newly open to investors who couldn’t get in before. Most of them won’t hold up to three questions.

Before committing capital to any fund pitching new access, an investor should put these three questions to the manager and watch how directly each one gets answered.

1. Does the buyback schedule match what the fund owns?

An interval fund offers to buy back a set percentage of its shares at regular intervals. SEC rules let that offer range from 5% to 25% of outstanding shares each period, and the proposal would give managers more room to set the schedule to match what’s in the portfolio.

The schedule should match the hold period of the fund’s assets, meaning how long the fund expects to own them before they’re sold or paid back. Private loans that pay back in two years and buildings held for seven can’t support the same buyback promise.

When requests exceed the cap, they get filled pro rata, meaning every investor who asked gets the same partial fill. An investor who wants out can be left holding the rest.

This has happened before. Blackstone’s BREIT, a non-traded real estate fund, limited withdrawals to 2% of net asset value a month, or 5% a quarter. When investors rushed for the exits in late 2022, Blackstone enforced those limits, according to Bain. BREIT isn’t an interval fund, but it shows what a cap does when everyone wants out at once.

What else to ask: Why is the schedule set where it is, given the hold period of the assets? What happened the last time requests exceeded the cap, or what’s the plan if they do?

Weak answer: “We offer the 5% minimum,” with no explanation of why that number fits the assets and no plan for a quarter when requests exceed the cap. An answer that stops at the regulatory minimum means the match hasn’t been thought through. 

2. What is the performance fee measured against, and who sets the number?

The proposal would change SEC Rule 205-3, which limits performance fees to “qualified clients.” It would broaden that definition to include accredited investors under Regulation D (the SEC rules that govern most private offerings). An advisor could then charge this kind of fee inside a fund or directly on an investor’s own account.

These fees are usually calculated on gains, including gains that haven’t been realized yet. In a fund holding private assets, there’s no market price for those gains. The manager, or a valuation firm it hires, decides what the assets are worth. That means the fee can depend on a number the manager sets.

Four questions sort this out:

Weak answer: “Our team values the assets.” The same goes for a fee paid on gains from assets that haven’t been sold, or one with no hurdle rate or high-water mark. A manager who can’t point to an independent, third-party valuation is asking an investor to trust a number set inside the fund.

3. Where does the deal flow come from?

This one matters most, and it’s the one new funds are least likely to answer directly.

A manager who works the way the Proximity Playbook describes can say who finds each deal, how and how early. The answer is often specific enough that an investor could trace it.

Fund size, diversification and track record all matter. None of them tell an investor where a deal came from.

Weak answer: “Our size and track record,” with no name attached to how deals are found. A manager who leans on those has given an investor a reason to keep asking.

Analyzing the answers you get

A fund that answers one question clearly and dodges the other two has shown an investor exactly where to dig before committing capital. Three clear answers earn a fund a spot on the shortlist.

Access is the starting line for diligence. Build Wealth’s own vehicles, and every other operator’s, are about to face a wider pool of investors asking these same questions for the first time. They should. Build Wealth asks them first.

“I skate to where the puck is going to be, not where it has been.” — Wayne Gretzky

By the time a deal makes the menu, the puck is already in the net.

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This is not financial advice. Illustrative output of a reasoned thought experiment. Not a backtest, guarantee, or prospectus. Actual results vary based on market conditions, fund selection, timing, fees, taxes, and factors not modeled. Private credit, CRE, and leveraged strategies involve significant risk including loss of principal. Consult a qualified financial advisor.