Financial Poise

Accredited Investor

  • July 1, 2021
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Accredited Investors are individuals who are allowed by law to invest in private equity, venture capital, hedge funds, and private placements. Regulation D, Rule 501 of the Securities Act of 1933 defines accredited investor as: (a) an individual (or an individual and their spousal equivalent) whose (joint) net worth exceeds $1 million, excluding the value of the primary residence; or (b) an individual with income exceeding $200,000 in each of the two most recent years, or a married couple with joint income exceeding $300,000 for those years, and a reasonable expectation of the same income level in the current year.

Amendments to the definition now also qualify the following persons and entities as accredited investors:

  • Individuals with certain certifications, designations or credentials issued by an accredited educational institution (members of the public may also propose additional certifications to the Commission for consideration)
  • Holders of licenses Series 7, Series 65 and series 82
  • Knowledgeable employees of a private investment fund
  • LLCs with $5 million in assets
  • SEC- and state-registered investment advisors
  • Family offices with at least $5 million in assets (and their family clients)
  • Any entity in excess of $5 million that wasn’t formed for the purpose of investing in the securities offered (e.g., Indian tribes, governmental bodies, funds)