Accredited Investor

An accredited investor is a person or entity that meets one of the categories in SEC Rule 501(a) of Regulation D. As an individual, you most commonly qualify through one of three routes: income above $200,000 in each of the previous two years (or above $300,000 jointly with a spouse or spousal equivalent), with a reasonable expectation of the same this year; net worth above $1 million, alone or jointly with a spouse or spousal equivalent, excluding your primary residence; or a qualifying Series 7, 65, or 82 license held in good standing. Other categories also exist, including certain knowledgeable employees of a fund. Many private offerings are limited to accredited investors, but the rules that apply depend on the offering.

Example: A fund may ask you to represent your accredited-investor status in its subscription documents.