Non-Accredited Investor: Definition, Investment Opportunities, and More
What is a non-accredited investor, what types of offerings can they invest in, and where you can find investment opportunities.
By
February 24, 2024
What is a non-accredited investor?
A non-accredited investor is any individual or entity that does not meet the income or financial sophistication requirements set by the Securities and Exchange Commission (SEC) to participate in certain investments only available to accredited investors.
Individual qualifications
A non-accredited investor does not hold any of the following qualifications to be accredited:
- Net worth over $1 million, excluding the primary residence (individually or combined with a partner).
- Income over $200,000 (individually) or $300,000 (combined with a partner) in each of the prior two years.
- Investment professionals in good standing who hold a Series 7, Series 65, or Series 82.
- Directors, Executive Officers, or General Partners (GP) of the company selling the securities.
- Any "family client" of a "family office" that qualifies as an accredited investor.
- For investments in a private fund, "knowledgeable employees" of the fund.
Entity qualifications
An entity that does not hold any of the following qualifications to be accredited:
- Entities where all equity owners are accredited investors.
- Corporations, partnerships, LLCs, 501(c)(3) organizations, employee benefit plans, "family office," and any "family client" of that office with assets in excess of $5 million.
- Entities that own more than $5 million in investments.
- Investment advisers (SEC- or state-registered or exempt reporting advisers) and SEC-registered broker-dealers.
- A bank, savings and loan association, insurance company, registered investment company, business development company, small business investment company, or rural business investment company.
What documents does the SEC accept to prove accreditation?
- A letter from your lawyer, accountant, deal broker, or investment advisor stating they have seen your financials and confirm that you meet a requirement to be accredited.
- Tax documents such as W-2s, 1099s, 1040s, and K-1s.
- Deposit, tax assessment, or appraisal certificates.
- Proof of a Series 7, 65, or 82 license.
Can international people be accredited?
- Yes, you need to convert the foreign currency into dollars to see if you meet any accreditation requirements. International investors must also comply with the law of their country.
What offerings can non-accredited investors invest in?
- Reg CF – Regulation Crowdfunding
- Reg A+ – Regulation A+
How much can non-accredited investors invest?
During any 12-month period, a non-accredited can invest the following amounts into each offering type:
Reg CF
- Everyone can invest $2,500; or
- If your annual income or net worth is less than $124,000, you can invest 5% of your annual income or net worth – whichever one is greater; or
- If both your annual income and net worth are $124,000 or more, you can invest 10% of your annual income or net worth – whichever one is greater, but you can not exceed an amount of $124,000.
Reg A+
- 10% of your net worth or annual income per offering — whichever is greater.
Where can I find non-accredited investment opportunities?
Startups and small businesses
Real estate
Alternative assets
- Masterworks (art)
- Rally (cars)
- Vinovest (wine)
- Public Alts (shoes, art, sports memorabilia, and more)
- Fig (video games)
