ACCREDITED INVESTOR QUALIFICATION
An accredited investor is an investor with a special status under US financial regulation laws. Generally, accredited investors include high-net-worth individuals, banks, financial institutions and other large corporations, who have access to complex and higher-risk investments such as venture capital, hedge funds and angel investments.
The definition of an accredited investor within the US as defined by the SEC is as follows.
- An accredited investor must earn income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR
- Has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).
- Any trust, with total assets in excess of $5 million, not formed to specifically purchase the subject securities, whose purchase is directed by a sophisticated person, or
- Any entity in which all of the equity owners are accredited investors.
For more information on the definition of an accredited investor check the SEC website link below.