ACCREDITED INVESTORS
The Law
Under federal securities laws, a company or private fund may not offer or sell securities unless the transaction has been registered with the Securities Exchange Commission (requires full disclosure per regulations), or an exemption from registration is available. Certain securities offerings that are exempt from registration (i.e., hedge funds, venture capital funds etc.), may only be offered to, or purchased by persons who are accredited investors. The principal purpose of the accredited investor concept is to identify who can bear the economic risk of investing in unregistered securities.
Note: these offerings, sometimes referred to as private placements, involve unique risks, and you should be aware that you could lose your entire investment.
Are You an Accredited Investor?
An accredited investor is a natural person who:
Under federal securities laws, a company or private fund may not offer or sell securities unless the transaction has been registered with the Securities Exchange Commission (requires full disclosure per regulations), or an exemption from registration is available. Certain securities offerings that are exempt from registration (i.e., hedge funds, venture capital funds etc.), may only be offered to, or purchased by persons who are accredited investors. The principal purpose of the accredited investor concept is to identify who can bear the economic risk of investing in unregistered securities.
Note: these offerings, sometimes referred to as private placements, involve unique risks, and you should be aware that you could lose your entire investment.
Are You an Accredited Investor?
An accredited investor is a natural person who:
- Earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and expects the same for the current year; or
- Has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).
- Any entity in which all equity owners are accredited investors; or
- Any trust with total assets in excess of $5 million, not formed to specifically purchase the subject securities, whose purchase is directed by a person of sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.