What is an Accredited Investor?

September 15, 2019

Regulated platforms such as iintoo follow strict investment guidelines set by the SEC. As a result, when raising capital for private placements, iintoo must only work with ”accredited investors”, as defined by Rule 501 of Regulation D of the U.S. Securities and Exchange Commission.

 

For an individual to be an accredited investor, he/she must meet any of the following criteria:
  • Net worth of at least $1,000,000, excluding the value of his/her primary residence
  • Individual annual income of ≥ $200,000 for the past two years
  • Combined annual income of ≥ $300,000 if married

 

Policy Rationale

While being an accredited investor doesn’t guarantee access to private deals, it’s a necessary condition. An accredited investor has the opportunity to hear about more deals, get access to them, and ultimately invest in those deals. Some such opportunities include:

  • Real Estate Crowdfunding
  • Angel Investing / Venture Capital
  • Hedge Funds

 

As a result, the US’ Accredited Investor requirements are designed to ensure that only individuals who are sufficiently capable of handling a high risk-high reward path are able to pursue these types of opportunities.

 

Policy Updates

The current definition of accredited investor has been in place without any significant update since 1985, and at the end of 2019 the SEC proposed amendments to the long-standing definition of accredited investor which would expand the number of individual investors that qualify by adding categories of eligibility based on their professional knowledge, experience or certifications, in addition to expanding the types of entities that qualify as accredited investors.

If you’re an accredited investor interested in discussing your investment goals or would like to learn more about our private offerings, feel free to sign up here to connect with one of our licensed investment specialists. 


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