Under U.S. securities laws, “accredited investors” are eligible to invest in certain unregistered securities. In order to qualify as an accredited investor, an individual or entity must meet certain criteria. Individuals can qualify by meeting certain financial criteria: (a) net worth over $1 million, excluding primary residence (individually or with spouse or partner); or income over $200,000 (individually) or $300,000 (with spouse or partner) in each of the prior two years, and reasonably expects the same for the current year. Individuals can also qualify by meeting certain professional criteria: (a) investment professionals in good standing holding the general securities representative license (Series 7), the investment adviser representative license (Series 65), or the private securities offerings representative license (Series 82); (b) directors, executive officers, or general partners (GP) of the company selling the securities (or of a GP of that company); (c) any “family client” of a “family office” that qualifies as an accredited investor; or (d) for investments in a private fund, “knowledgeable employees” of the fund. Entities can qualify as an accredited investor as follows: (a) entities owning investments in excess of $5 million; (b) corporations, partnerships, LLCs, trusts, 501(c)(3) organizations, employee benefit plans, “family office” and any “family client” of that office with assets in excess of $5million; (c) investment advisers (SEC- or state-registered or exempt reporting advisers) and SEC-registered broker-dealers; or (d) a bank, savings and loan association, insurance company, registered investment company, business development company, or small business investment company or rural business investment company.
