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).
Ryan RobertsStartup Lawyer
Ryan Roberts is a startup lawyer with more than two decades of experience advising on venture financings and M&A transactions totaling more than $1 billion. He is the author of the Amazon bestselling startup law book Acceleration.
