Crowdfunding Resources

Terminology

Accredited Investor

The federal securities laws define the term “accredited investor” in Rule 501 of Regulation D as:

A bank, insurance company, registered investment company, business development company, or small business investment company;

An employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;

A charitable organization, corporation, or partnership with assets exceeding $5 million;

A director, executive officer, or general partner of the company selling the securities;

A business in which all the equity owners are accredited investors;

A natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person;

A natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or

A trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes.

This pamphlet from the SEC is a fantastic reference for those who want more information on accredited investors: http://www.sec.gov/investor/alerts/ib_accreditedinvestors.pdf

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