The three tests most individuals use.
An individual may meet the definition through one of these categories, subject to its conditions. You need to satisfy the conditions of one category, not all three.
- Income
Individual income over $200,000 in each of the two most recent years, or joint income with a spouse or spousal equivalent over $300,000 in each of those years, and a reasonable expectation of reaching the same income level this year.
- Net worth
Individual net worth, or joint net worth with a spouse or spousal equivalent, over $1 million. Your primary residence is not counted as an asset, and special rules apply to debt secured by it.
- Professional license
A Series 7, Series 65 or Series 82 license held in good standing. These are the credentials the SEC has designated for this test.
Other ways an individual may qualify
- A director, executive officer or general partner of the issuer of the securities, or of a general partner of that issuer.
- A "knowledgeable employee" of a private fund that is the issuer, for investments in that fund. The term has a specific regulatory definition; working for a fund or its adviser is not enough on its own.
- A "family client" of a qualifying family office, when that family office directs the investment.
Your home is excluded, but some home debt is not.
The $1 million net worth test has specific rules for your primary residence and the debt secured by it.
- Your primary residence is not counted as an asset.
- Debt secured by your primary residence is not counted as a liability, up to the home's estimated fair market value. Any amount above that value counts as a liability.
- If that debt increased in the 60 days before you invest, other than to buy the home, the increase counts as a liability.
- Joint net worth can combine your net worth with that of your spouse or spousal equivalent. The assets do not need to be held jointly, and you do not need to invest jointly.
Entities have their own tests, each with conditions.
Trusts, companies, family offices and plans qualify under separate categories. Most require that the entity was not formed for the specific purpose of making the investment.
- Organizations with over $5 million in assets
Corporations, partnerships, LLCs, Massachusetts or similar business trusts and 501(c)(3) organizations with total assets over $5 million, not formed for the specific purpose of acquiring the securities offered.
- Trusts
Trusts with total assets over $5 million, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person.
- Entities owned by accredited investors
Any entity in which all of the equity owners are accredited investors. Ownership may be looked through to the individuals behind it.
- Other entities with over $5 million in investments
Entity types not covered by another category, not formed for the specific purpose of acquiring the securities offered, that own over $5 million of "investments" as SEC rules define that term. Investments are not the same as total assets.
- Family offices
Family offices with over $5 million in assets under management, not formed for the specific purpose of acquiring the securities offered, whose investment is directed by a person with the knowledge and experience to evaluate its merits and risks.
- Regulated institutions and advisers
Banks, savings and loan associations, registered broker-dealers, SEC- or state-registered investment advisers, exempt reporting advisers, insurance companies, registered investment companies, business development companies, private business development companies, and licensed small business or rural business investment companies.
- Benefit plans
ERISA plans whose investment decision is made by a bank, insurer or registered adviser acting as plan fiduciary, that have total assets over $5 million, or that are self-directed with decisions made solely by accredited investors; and state employee plans with total assets over $5 million.
How accredited status is verified.
In an offering under Rule 506(c), the issuer must take reasonable steps to verify that every purchaser is accredited. The rule lists non-exclusive methods for individuals.
- Income
Reviewing IRS forms that report your income for the two most recent years (for example Form W-2, Form 1099, Schedule K-1 to Form 1065 or Form 1040), plus your written statement that you reasonably expect to reach the required income this year.
- Net worth
Reviewing documents dated within the prior three months: bank, brokerage and other securities statements, certificates of deposit, tax assessments or independent appraisals for assets, and a consumer report from a nationwide credit bureau for liabilities, plus your written statement that you have disclosed all liabilities.
- Third-party confirmation
A written confirmation from a registered broker-dealer, an SEC-registered investment adviser, a licensed attorney in good standing or a registered CPA in good standing that they took reasonable steps to verify your status within the prior three months and determined that you are accredited.
- Earlier verification by the same issuer
If the same issuer previously verified you using these steps, your written statement at the time of sale that you still qualify can satisfy the requirement for five years from that verification, unless the issuer knows otherwise. It does not carry over between issuers or platforms.
When you qualify on joint income or joint net worth, the documents and written statements cover both you and your spouse or spousal equivalent.
These methods are examples, not requirements. Each platform or sponsor runs its own process and decides which methods and documents it accepts.
Verification happens at subscription, through our administrator.
Your answer on our interest form is self-reported. It is not verification, and it does not establish your eligibility or the acceptance of any subscription. Any verification an offering requires happens separately, during subscription.
Common questions.
- Do I need to meet more than one test?
No. You need to satisfy the conditions of at least one category. Verification and acceptance of a subscription are separate steps.
- Is exactly $200,000 of income enough?
No. The thresholds are "in excess of": over $200,000 of individual income, over $300,000 of joint income, and over $1 million of net worth.
- Does my home count toward net worth?
Your primary residence is not counted as an asset. Debt secured by it is not counted as a liability up to the home's estimated fair market value, but debt above that value, and any increase in that debt in the 60 days before you invest other than to buy the home, counts as a liability.
- Can I combine income or net worth with a partner?
Yes, with a spouse or spousal equivalent. A spousal equivalent is a cohabitant in a relationship generally equivalent to that of a spouse. The joint income test is over $300,000 in each of the two most recent years, with a reasonable expectation of the same this year. Joint net worth does not require jointly held assets or a joint investment.
- Does answering yes on an interest form make me accredited?
Your answer on our interest form is self-reported. It is not verification, and it does not establish your eligibility or the acceptance of any subscription. Any verification an offering requires happens separately, during subscription.
- Who makes the final determination for Access Fund funds?
For Access Fund funds, accredited status is reviewed during subscription through the verification process administered by AngelList, our fund administrator. That process decides which documents and methods it accepts and may ask for more. The fund and the administrator must be satisfied with the evidence before a subscription can be accepted, so meeting a test summarized here does not by itself mean you will be accepted.
- What if I'm not sure I qualify?
Ask your CPA, attorney or financial adviser. A registered broker-dealer, SEC-registered investment adviser, licensed attorney or registered CPA can also provide a written third-party confirmation, if the offering's verification process accepts one.
Questions about accreditation or verification for our funds? Email team@accessfund.vc.
Primary sources.
- 17 CFR 230.501(a): the accredited investor definitionElectronic Code of Federal Regulations. The controlling text.
- 17 CFR 230.506(c)(2)(ii): verification of accredited investor statusElectronic Code of Federal Regulations.
- SEC: Accredited InvestorsThe SEC's plain-English summary.
- AngelList Help Center: How can I prove I'm an accredited investor?Process help from our fund administrator. Not legal authority.
See how Access Fund’s Demo Day funds give accredited investors diversified exposure to each Y Combinator batch.
Eligibility and verification requirements vary by offering. Any investment is subject to the offering documents and acceptance.Risks & Disclosures
A summary, not the law. The categories and verification methods described here summarize 17 CFR 230.501(a) and 230.506(c). They are not a complete statement of the law. Each category has conditions and exceptions, the regulation controls over this summary, and the SEC can change the definition. The dollar thresholds are not adjusted for inflation.
No determination of eligibility. Meeting a summarized test does not verify your accredited status, show that an investment is suitable for you, or guarantee that you can participate in any offering. Additional eligibility and subscription requirements may apply.
Final determination. For Access Fund funds, accredited status is reviewed during subscription through the verification process administered by AngelList, our fund administrator. That process decides which documents and methods it accepts and may ask for more. The fund and the administrator must be satisfied with the evidence before a subscription can be accepted, so meeting a test summarized here does not by itself mean you will be accepted. Your answer on our interest form is self-reported. It is not verification, and it does not establish your eligibility or the acceptance of any subscription. Any verification an offering requires happens separately, during subscription.
Verification depends on the offering. Verification requirements depend on the offering's exemption. In an offering under Rule 506(c), the issuer must take reasonable steps to verify that every purchaser is accredited. The methods described here do not guarantee that any particular document, professional letter or earlier verification will be accepted.
Not an endorsement. Accredited investor status is not an endorsement by the SEC or any other regulator, and it does not mean an investment is safe.
General information. This page provides general information only. It is not legal, tax, accounting or investment advice, and it does not take your circumstances into account. Consult your own advisers before making any investment decision.
No offer. This page does not contain the complete terms of any offering. Any offer is made only to eligible investors through the applicable official offering and subscription documents, which describe the terms, eligibility requirements, fees and risks, and control in the event of any inconsistency. Acceptance of any subscription is subject to those documents and the applicable review process.
Offering eligibility. Eligibility and verification requirements differ by offering. Access Fund Demo Day funds are intended to rely on Rule 506(c) of Regulation D, and participation is limited to verified accredited investors.
Risk. Venture investments are speculative and illiquid, are not readily transferable, and may result in the loss of the entire amount invested. They are suitable only for investors who can bear that risk for an extended period.
External sources. Links to regulators and third parties are provided for reference. Their content may change, Access Fund is not responsible for it, and a link does not imply that the source endorses Access Fund.
Accuracy. We review this content periodically, but rules and processes change. Information is current only as of the review date shown on the page.
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