Are you an Accredited Investor and what is the role of Accredited Investors?
As companies raise capital, the accredited investor definition heavily influences their pool of potential investors, and as investors, the definition determines their eligibility to invest in many early-stage startups. A number of federal securities laws limit participation in offerings to accredited investors or contain restrictions on nonaccredited investors’ participation.
What are the requirements to become accredited?
Accredited investors (i.e., natural persons) are determined based on their wealth, income, and other financial sophistication measurements.
Financial Criteria
- Net worth over $1 million, excluding the primary residence (individually or with spouse or partner)
- Income over $200,000 (individually) or $300,000 (with spouse or partner) in each of the prior two years, and reasonably expects the same for the current year
Professional Criteria
- Investment professionals in good standing holding the general securities representative license (Series 7), the investment adviser representative license (Series 65), or the private securities offerings representative license (Series 82).
- Directors, executive officers, or general partners (GP) of the company selling the securities (or of a GP of that company).
- Any “family client” of a “family office” that qualifies as an accredited
