A more thorough explanation:

Section 4(a)(7) is a part of the Securities Act that allows individuals to resell securities that were issued in a private placement, but with restrictions on resale. This section is also known as Section 4(1 ½).

Under Section 4(a)(7), an individual who is not the issuer of the security can privately resell the security if certain conditions are met:

• The purchasers must be accredited investors as defined by Regulation D.
• The seller cannot generally solicit the securities.
• If the initial issuer of the security is a non-reporting issuer, then the seller and prospective purchaser must have access to basic information on the issuer.
• The seller cannot be a "bad actor" under Rule 506(d)(1) under Regulation D.
• The initial issuer of the security cannot be in bankruptcy, a blank check company, or a shell company.
• The securities cannot be part of an unsold allotment to an underwriter.
• The securities must have been outstanding for at least 90 days prior to their resale.

For example, let's say that John purchased shares in a private placement of a startup company. The shares are subject to a restriction on resale, meaning that John cannot sell them to just anyone. However, John can resell the shares to an accredited investor who meets the conditions outlined in Section 4(a)(7).

Another example would be if a venture capital firm invested in a startup and received restricted shares. The firm could later resell those shares to another accredited investor who meets the conditions of Section 4(a)(7).