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What is an Accredited Investor?

Accredited Investor 

Specific to the qualified private placement of securities that are made pursuant to Regulation D of the Securities Act, exempting issuers from registration requirements. Rule 501(a) of Regulation D defines an “accredited investor” as an entity or natural person who meets certain net worth tests or other specified quantitative criteria – e.g., (1) directors, executive officers and general partners of the issuer (issuer “insiders”); (2) individuals whose net worth or joint net worth with their spouse exceeds $1 million (excluding the value of their primary residence); and (3) individuals whose income was in excess of $200,000 in each of the two most recent years or whose joint income with their spouse was in excess of $300,000 in each of those years and who have a reasonable expectation of reaching the same income level in the current year.

Source: The Startup Dictionary | LawTrade

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