How Individuals Can Qualify As Accredited Investors

Rule 504

Financial Criteria

        • Net worth over $1 million, excluding primary residence (individually or with spouse or partner);
        • 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.

Professional Criteria

        • 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);
        • Directors, executive officers, or general partners (GP) of the company selling the securities (or of a GP of that company);
        • Any “family client” of a “family office” that qualifies as an accredited investor;
        • For investments in a private fund, “knowledgeable employees” of the fund.

How Entities Can Qualify As Accredited Investors

Depending upon the structure of the entity or its assets, entities may qualify as an accredited investor.

Investments

Entities owning investments in excess of $5 million.

Assets

The following entities with assets in excess of $5 million: corporations, partnerships, LLCs, trusts, 501(c)(3) organizations, employee benefit plans, “family office” and any “family client” of that office.

Owners As Accredited

Entities where all equity owners are accredited investors.

Investment Advisors

Investment advisers (SEC- or state-registered or exempt reporting advisers) and SEC-registered broker-dealers.

Financial Entities

A bank, savings and loan association, insurance company, registered investment company, business development company, or small business investment company or rural business investment company.