What is an accredited investor?

Why the definition exists

Companies and funds can sell securities without registering them with the SEC if they limit the sale to investors the rules presume can bear the risk and fend for themselves. "Accredited investor" is the label for those investors. The current definition was last amended by the SEC effective December 8, 2020.

1. The net worth test

Net worth over $1,000,000, alone or together with your spouse or spousal equivalent, excluding your primary residence.

• Add up everything you own except your home; subtract everything you owe except the mortgage on that home.
• If you owe more on the home than it is worth, count the excess as a liability.
• If you borrowed against the home in the 60 days before investing (other than to buy it), count that new debt as a liability.
• Joint net worth may be combined even if only one spouse invests. A "spousal equivalent" is a cohabitant in a relationship generally equivalent to marriage.

2. The income test

Income over $200,000 on your own, or over $300,000 together with your spouse or spousal equivalent, in each of the two most recent years, plus a reasonable expectation of the same level this year. Use the same basis for both years unless you married during that period.

3. Professional licenses

Holding a FINRA Series 7, Series 65, Series 82 license in good standing qualifies you on its own, regardless of income or assets. The SEC may add other credentials by order; none have been added so far.

4. Narrower paths for individuals

• Family clients of a family office with more than $5,000,000 under management, when a knowledgeable person directs the investment.
• Insiders — directors, executive officers, and general partners of the issuer (or of its general partner) — for that issuer's own offerings.
• Knowledgeable employees of a private fund, for that fund's offerings.

5. Entities and trusts

• Corporations, partnerships, LLCs, trusts, 501(c)(3) organizations, and employee benefit plans with more than $5,000,000 in assets, not formed just to make the investment.
• Any entity owning more than $5,000,000 in investments.
• Entities in which every equity owner is accredited. Revocable trusts are generally looked through to their grantors.
• Banks, insurance companies, registered investment companies, business development companies, SBICs and rural business investment companies, SEC- and state-registered and exempt reporting investment advisers, and registered broker-dealers.
• Family offices with more than $5,000,000 under management.

A self-directed IRA is generally evaluated based on its owner.

6. How verification works

This site does not verify anyone. In offerings that use general advertising under Rule 506(c), the issuer must take reasonable steps to verify each purchaser — commonly by reviewing two years of tax forms plus a written representation about this year; reviewing recent bank, brokerage, and appraisal statements plus a credit report; obtaining a letter from a registered broker-dealer, SEC-registered adviser, licensed attorney, or CPA; or accepting a written representation from an investor the issuer verified within the last five years. Since March 2025 SEC staff also accepts a substantial minimum investment ($200,000 for individuals, $1,000,000 for entities) together with written representations, absent contrary knowledge. In offerings without general advertising (Rule 506(b)), issuers rely on a reasonable belief formed through their relationship with you.

7. What's changing

The dollar thresholds have not changed since 1982. The House passed the INVEST Act (H.R. 3383) on December 11, 2025; it would index the thresholds to inflation and add license, education, experience, and exam-based paths. It awaits the Senate. The SEC's 2026 rulemaking agenda also lists possible amendments. When any rule changes, this site's checks are updated and versioned; the version that evaluated your answers is stored with your result.