Legal & Compliance
Qualified Purchaser
An investor with $5M+ in investments — a higher standard than accredited investor, required for Section 3(c)(7) funds targeting institutional LP bases.
A Qualified Purchaser (QP) is an investor with $5M or more in investments (individuals) or $25M or more in investments managed for others (institutions). The QP standard is higher than accredited investor status. Funds relying on the Section 3(c)(7) exemption from Investment Company Act registration (common for larger institutional-focused VC funds) can have an unlimited number of investors but only QPs. Section 3(c)(1) funds (relying on a different exemption) can take accredited investors but are limited to 100 investors. The QP threshold was designed to allow sophisticated institutional capital to flow into private funds without registration requirements while ensuring investors can withstand potential losses.