What is an accredited investor?

Based on the current U.S. Securities and Exchange Commission (SEC) regulations, most startup investment opportunities are available only to accredited investors. An accredited investor is defined under rules set by the SEC. You are an accredited investor if you meet one or more of the following criteria: 

  1. A natural person who has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence);
  2. A natural person who earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year; 
  3. An entity in which all of the equity owners are accredited investors;
  4. A trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person with sufficient knowledge and experience in financial and business matters necessary to evaluate the merits and risks of the prospective investment;
  5. A 501(c)(3) organization, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;
  6. A director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer;
  7. A private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940; or
  8. Certain financial institutions, small business development companies, and employee benefit plans may also qualify as accredited investors if they meet specific standards set forth in Rule 501 of Regulation D. Please contact us at help@microventures.com if you’d like to discuss further.