An accredited investor is an individual or entity with sufficient financial resources and/or expertise to understand and manage complex, often riskier, private investments. They are typically high-net-worth individuals and entities, such as banks, financial institutions, and large corporations, with access to venture capital, hedge funds, and other private investment opportunities.

Key Characteristics and Requirements:

Income and Net Worth:

Individuals must have a net worth of over $1 million (excluding the value of their primary residence) or an annual income of over $200,000 (or $300,000 jointly with a spouse) for the last two years with a reasonable expectation of earning the same in the current year.

Financial Expertise:

Individuals with certain financial licenses (e.g., Series 7, Series 65, or Series 82) also qualify.

Knowledgeable Employees:

Individuals who are considered "knowledgeable employees" of a private fund can also qualify as accredited investors.

Entities with Assets:

Certain entities, such as those with over $5 million in assets, including corporations, partnerships, and trusts, may also qualify.

Investment Advisers and Broker-Dealers:

SEC-registered investment advisers and broker-dealers are also considered accredited investors.