What does it mean to be an accredited investor?

‘Accredited investor’ is a term defined by various countries’ security laws that delineate investors permitted to invest in certain types of higher-risk investments, including seed money, limited partnerships, hedge funds, private placements, and angel investor networks. The term generally includes wealthy individuals and organizations such as banks, insurance companies, significant charities, some corporations, endowments, and retirement plans.

For example, in the United States, for an individual to be considered an accredited investor, he or she must have a net worth of at least one million US dollars (excluding the value of one’s primary residence), or have an income of at least $200,000 each year for the last two years (or $300,000 together with his or her spouse if married) and have the expectation to make the same amount this year.

See additional information on what it means to be accredited here.