Accredited Investor

How to work with Private Investors / Regulation D



Capital Investors

Accredited Investor

Form D

Reg A Offerings

Regulation D

Rule 504

Rule 505

Rule 506

Broker Dealer

BD Compliance

Online Broker

Who is an accredited investor?

Accredited Investor

Regulation D under the Securities Act of 1933 define an accredited Investor as:
1) Is a natural person whose individual net worth, or joint net worth with that person's spouse, at the time of the purchase exceeds $1,000,000;
2) Is a natural person who had individual income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 in each of those years and has a reasonable expectation of reaching the same level of income in the current year;
3) Is a director, executive officer, or general partners of the company offering or selling the securities;
4) Is a business in which all the equity owners are accredited investors;
5) Is any organization with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities being offered;
6) Is any trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities being offered, whose purchase is directed by a sophisticated person; and
7) Is a non-profit organization with assets in excess of $5,000,000.

Under the Securities Act of 1933, a company that offers or sells its securities must register the securities with the SEC or find an exemption from the registration requirements. The Act provides companies with a number of exemptions. For some of the exemptions, such as rules 505 and 506 of Regulation D, a company may sell its securities to what are known as "accredited investors."

Accredited Definition | Private Investors



Sophisticated Investor

The Securities Act generally requires companies to give investors "full disclosure" of all "material facts," the facts investors would find important in making an investment decision.

The federal government and state governments each have their own securities laws and regulations. If your company is selling securities, it must comply with federal and state securities laws.

Defining accredited investor requirements