Becoming an Accredited Investor

To become an accredited investor, you must meet certain requirements set by the Securities and Exchange Commission (SEC). The two most common ways to meet these requirements are:

Income: An individual must have an annual income of at least $200,000 for the past two years, with the expectation of earning the same or higher income in the current year. Alternatively, a married couple must have a combined annual income of at least $300,000 for the past two years, with the expectation of earning the same or higher income in the current year.

Net Worth: An individual must have a net worth of at least $1 million, either alone or together with a spouse. This net worth must exclude the value of their primary residence.

If you meet either of these requirements, you can become an accredited investor and gain access to alternative investment opportunities, such as those offered by CrowdStreet.

To prove your status as an accredited investor, you will need to provide documentation of your income or net worth, such as tax returns or bank statements. You may also need to complete a questionnaire or provide other information to verify your status.

In addition to individuals, certain entities can also qualify as accredited investors. These include:

  1. Trusts: A trust with assets over $5 million, not formed for the specific purpose of acquiring the securities offered, can qualify as an accredited investor.
  2. Banks, Broker-Dealers, and Registered Investment Companies: These entities are deemed to be accredited investors if they meet certain criteria, such as having at least $5 million in total assets.
  3. Business Entities: Certain business entities, such as corporations, partnerships, and LLCs, can be accredited investors if they have total assets of at least $5 million and were not formed for the specific purpose of acquiring the securities offered.
  4. Employee Benefit Plans: Employee benefit plans, such as 401(k) plans or pension plans, with total assets over $5 million can qualify as accredited investors.
  5. Government Entities: Certain government entities, such as state governments and agencies, can qualify as accredited investors.

 

Specific criteria for qualifying as an accredited investor may vary depending on the type of entity. If you are unsure whether your entity qualifies, it’s best to consult with a legal or financial professional.

Allowing entities to qualify as accredited investors expands the pool of potential investors and can provide additional capital for alternative investment opportunities.

There are several websites that can be used to verify an individual’s accredited investor status. These include:

  1. VerifyInvestor.com: This website provides accredited investor verification services for issuers, broker-dealers, and crowdfunding platforms. It offers a range of verification options, including electronic verification through an online portal, verification via phone or email, and verification of income or net worth through financial statements or tax documents.
  2. AccreditedInvestorVerification.com: This website provides a similar range of verification options, including online verification, verification via phone or email, and verification of income or net worth through financial statements or tax documents.
  3. Crowdentials.com: This website offers verification services for crowdfunding platforms and issuers. It offers both online verification and verification via phone or email.
  4. EarlyIQ.com: This website provides verification services for issuers, broker-dealers, and crowdfunding platforms. It offers a range of verification options, including online verification, verification via phone or email, and verification of income or net worth through financial statements or tax documents.

It’s important to note that these websites are not the only options for verifying accredited investor status, and issuers or platforms may have their own preferred verification services or processes. Additionally, it’s important for investors to carefully review the verification process and ensure that they are comfortable with the information being provided and how it will be used.

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