Legal & Compliance
Accredited Investor
An individual or entity that meets the SEC's financial thresholds to invest in private securities — typically a net worth over $1M or annual income over $200K.
Under SEC rules, an accredited investor is an individual with a net worth exceeding $1 million (excluding primary residence) or annual income exceeding $200K ($300K with a spouse) for the past two years. Institutions like banks, investment funds, and entities with over $5M in assets also qualify. The accredited investor designation allows participation in private investment opportunities — VC funds, angel deals, SPVs — that are exempt from SEC registration. The intent is to ensure investors can absorb potential losses. The SEC expanded the definition in 2020 to include certain knowledgeable individuals regardless of wealth.