Who are accredited investors?

Accredited investors include high-net-worth individuals, banks, insurance companies, brokers, and trusts . Accredited investors are defined by the SEC as qualified to invest in complex or sophisticated types of securities that are not closely regulated.

What is the role of accredited investors?

For companies raising capital, the accredited investor definition largely determines who is in their pool of potential investors, and for investors whether they are eligible to invest in many early-stage companies.

How does the SEC define an accredited investor?

Simply put, the SEC defines an accredited investor through the confines of income and net worth in two ways: A natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year.