An accredited investor, is a term defined in regulations issued by the Securities Exchange Commission (“SEC”) Under the Securities Act of 1933. For an individual to fit the definition, he or she must satisfy one of the following conditions:
– An unmarried individual must have had income exceeding $200,000 in each of the two most recent years and a reasonable expectation of receiving income in excess of that amount in the current year;
– Married couples must have had income exceeding $300,000 in each of the two most recent years and a reasonable expectation of receiving income in excess of that amount in the current year; or
– An individual must have a net worth (or, if that individual is married, the couple’s joint net worth) in excess of $1 million, calculated without including the value of such individual’s (or couple’s) primary residence.
Certain entities, or professional persons can also qualify as accredited investors. You’ll find a more complete definition in our educational materials. Just search for the Accredited Investor definition.