The definition of “accredited investor” can be found in Regulation D under the Securities Act of 1933. There are several different ways to be qualified as an accredited investor. These include:
- Individuals with a pre-tax income exceeding $200,000 annually ($300,000 per couple) with the expectation of that continuing in the next year;
- Individuals having a net worth of more than $1 million, excluding the value of a primary residence;
- Individuals holding certain professional certifications, designations, and licenses that are active and in good standing (FINRA Series 7, Series 82, Series 65 holders);
- Entities owning more than $5,000,000 in “investments” (as defined in the Investment Company Act of 1940), not formed for the specific purpose of acquiring the subject securities;
- Entities in which all equity owners are accredited; and
- Trusts with total assets in excess of $5,000,000 not formed for the specific purpose of acquiring the subject securities and whose purchase is directed by a “sophisticated person” as defined in Regulation D.
For the full definition of “accredited investor” please see 17 CFR § 230.501(a).