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Accredited investor

Refers to both institutional and individual investors meeting the minimum wealth standard requirements. Rule 501 of Regulation D of the Securities Act of 1933 defines an accredited investor as:

  • a bank, savings and loan association or other lending institution, whether acting in its individual or fiduciary capacity;
  • any private business development company as defined in §202(a)(22) of the Investment Advisors Act of 1940;
  • any organization described in section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5 million;
  • any director, executive officer or general partner of the issuer of the securities being offered or sold, or any director, executive officer or general partner of a general partner of that issue;
  • an individual whose individual net worth or joint net worth with that person’s spouse exceeds $1 million (*net worth does not include an individual’s primary residence);
  • an individual whose income exceeds $200,000 in each of the two most recent years or whose joint income with his or her spouse exceeds $300,000 in each of the two most recent years;
  • any trust, with assets in excess of $5 million not formed for the specific purpose of acquiring the securities offered; or
  • any entity in which all of the equity owners are accredited investors.