Accredited investor?

There are some investment opportunities such as  securities that are unregistered with the Securities and Exchange Commission (a US government agency), certain types of Private Placement Investments, and some passive limited partnerships that are available only to an accredited investor.  To become an accredited investor there is no class to take, no registration process, no test, and no ID card.  You just need a minimum level of net worth or income to qualify as an accredited investor. 

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.  Registration of an investment with the Securities and Exchange Commission (SEC) can be very time consuming and insanely expensive.  Fortunately, the SEC provides a vehicle for investment sponsors to choose exemption from registration with the SEC under certain strict guidelines. The Act provides companies with a number of exemptions listed in Regulation D. For some of the registration exemptions of Regulation D of the Act, a company may sell its securities to what are known as “accredited investors” and potential to a limited number of non-accredited investors.

Below is the definition of an accredited investor from the Securities and Exchange Commission Website:

Accredited Investor

The federal securities laws define the term accredited investor in Rule 501 of Regulation D as:

•     a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person is an accredited investor; or
•     a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year is an accredited investor; or
•     a bank, insurance company, registered investment company, business development company, or small business investment company; or
•     an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million; or
•     a charitable organization, corporation, or partnership with assets exceeding $5 million; or
•     a director, executive officer, or general partner of the company selling the securities; or
•     a business in which all the equity owners are accredited investor (s); or
•     a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes.

If you are an Accredited Investor or Non – Accredited Investor looking for passive investment opportunities, feel free to schedule an appointment with our team to see if you are qualified to participate in future group investment *syndication* opportunities.