Accredited Investor

Term used by the Securites Exchange Commission (SEC) in Regulation D of private placements to define individuals or entities that are financially sophisticated and have no need for the protection provided by certain government filings. Some restricted offerings, limited partnerships, and angel investor networks are available only to accredited investors. Accredited Investors are broadly speaking: institutional type accounts and wealthy individuals (individuals or entities with a net worth of $1 Million or more, individuals or entities with annual income of $200,000 or more, individuals or entities who purchase $150,000 or more of the offering and this does not represent more than 20% of their net worth). Companies who wish to raise capital from individuals without issuing registered securities must limit their search to Accredited Investors.

See also: SEC’s definition of Accredited Investor, Hedge Fund, Qualified Investor