Accredited Investor
Definition
An accredited investor is a person or entity that meets financial thresholds set by securities regulators (in the US: income above $200K, or $300K jointly, or net worth above $1M excluding primary residence) and may therefore invest in private securities like startup equity.
How it comes up in fundraising
Most startup fundraising exemptions in the US assume accredited investors, which is why angel checks come predominantly from wealthy individuals.
Frequently asked questions
Can non-accredited investors invest in startups?
Only through specific channels like regulated equity crowdfunding, which come with caps and disclosure requirements.
Who verifies accreditation?
The company raising must take reasonable steps to confirm status, often via investor self-certification or third-party verification depending on the exemption used.
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