What is an Accredited Investor?
An accredited investor is a term used by the Securities and Exchange Commission (SEC) under Regulation D
to refer to investors who are financially sophisticated and have a reduced need for the protection provided by
certain government filings. Accredited investors include individuals, banks, insurance companies, employee
benefit plans, and trusts.
BREAKING DOWN ‘Accredited Investor’
In order for an individual to qualify as an accredited investor, he or she must accomplish at least one of the following:
- Earn an individual income of more than $200,000 per year, or a joint income of $300,000, in each of the last two
years and expect to reasonably maintain the same level of income.
- Have a net worth exceeding $1 million, either individually or jointly with his or her spouse.
- Be a general partner, executive officer, director or a related combination thereof for the issuer of a security