An accredited investor is an individual or entity that meets specific criteria set by the SEC, which allows them to invest in certain private investment opportunities that are typically not available to the general public.
For Individuals:
- Income:
- You must have an annual income of $200,000 or more (or $300,000 with a spouse) in the last two years, and you must reasonably expect the same for the current year.
- Net Worth:
- Your net worth must exceed $1 million, excluding the value of your primary residence. This can include investments, real estate, and other assets.
For Entities:
- Certain entities, such as banks, insurance companies, and employee benefit plans, can also be considered accredited investors if they meet the SEC's criteria.
Why Verify Your Accredited Investor Status?
- Access to Private Investment Opportunities:
Accredited investors can invest in private offerings that are typically unavailable to non-accredited investors.
No Investment Limits in Certain Offerings:
Accredited investors can invest without limits in Regulation CF offerings, Reg A Tier 2 offerings, and Reg CF offerings, unlike non-accredited investors who have investment limits.