Accredited Investor

An accredited investor is an individual who either:

Has a net worth that exceeds $1 million (alone or with a spouse)

Has earned an excess of $200,000 in each of the prior two years (or $300,000 together with a spouse or spousal equivalent), and reasonably expects the same for the current year.

Someone can also be considered “accredited” if they hold in good standing a Series 7, 65 or 82 license. Accredited investors can participate in venture capital, angel investments, real estate investment funds, private equity funds, hedge funds, and more.

While the criteria to become an accredited investor is very specific, there’s no standardized federal verification process. It’s up to each startup to verify the status of a potential investor, before allowing them to contribute to a round of funding.