An accredited investor (U.S.) is a person or entity that meets certain criteria under SEC Rule 501(a) of Regulation D, generally indicating they have sufficient financial sophistication and/or financial capacity to participate in certain private (unregistered) securities offerings.
For individuals, the most common ways to qualify are:
Income test: earned income over $200,000 in each of the two most recent years (or $300,000 jointly with a spouse/spousal equivalent) with a reasonable expectation of the same this year.
Net worth test: net worth over $1,000,000, alone or jointly with a spouse/spousal equivalent, excluding the value of the primary residence.
There are also other qualifying categories (e.g., certain professional certifications, “knowledgeable employees” of private funds, and various entity types).
