Accredited Investor Definition Rule 501

An accredited investor, in the context of a natural person, includes anyone 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, OR
  • has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).

Certain types of entities, including banks, hedge funds, broker/dealers, employee benefit plans, partnerships, charitable organizations, corporations, corporate officers of the issuers, and trusts with assets over $5 million can also qualify as “accredited investors. Additionally in an instance where an entity in which all of the equity owners are accredited investors, that entity is considered an accredited investor.

The regulators are very serious about enforcing the rules of solicitation and how perspective investors can be approached.

We would like to issue a word of caution when considering taking in funds from non accredited investors.

Please refer to rules 504, 505, 506, and 144 for more detailed information.