Home Blog Who Qualifies as an Accredited Investor?

Jump to Section

Quick Facts — Investment Contract Lawyers

Accredited investors consist of many people and entities, from banking giants to Fortune 100 companies down to hobby investors and families saving for college and retirement. It is also a rapidly expanding group of investors.

Whether you’re considering dabbling in the rarified group of investors or just curious about how it works, the article below outlines what to know about accredited investors.

What is an Accredited Investor?

An accredited investor is an individual or business entity with strong financial knowledge and high net worth. They are allowed to invest in securities, such as convertible notes and hedge funds. An accredited investor is not registered with the SEC and must satisfy specific criteria.

Finance laws created accredited investors to help companies bypass SEC public reporting requirements in response to the Great Depression to improve market capital access. Accredited investors remain privately-owned but trade under an exemption in the law, and accredited investor sales fall under these exemptions. As long as these individuals have a sufficient net worth to cushion against losses, they are not subject to SEC reporting rules and regulations.

Here is an article that also defines accredited investors.

Benefits of Being an Accredited Investor

There are several benefits of being an accredited investor. These individuals are highly qualified but unaware of how powerful their position is. Some of these benefits include the ability to invest in small businesses, the diversity of an investment portfolio, and access to more favorable returns.

Below, we’ve taken a closer look at three of the benefits of being an accredited investor:

Benefit 1. Favorable Investment Opportunities

A private placement is when a business raises capital outside of the public capital markets. These private placements offer higher yields than the public markets since the underlying issuer has available capital. Gaining access to higher-yield capital markets is far easier when you are an accredited investor.

Learn more about private placement memorandums .

Benefit 2. Small Businesses Investment Opportunities

Accredited investors can support small businesses with missions that align with their values, and Seed-funding platforms connect them with startups at any stage of their development. Typical small business investment opportunities include food manufacturers, “Main Street” businesses, online retailers, product manufacturing, social causes, and other small businesses startups.

Benefit 3. Investment Portfolio Diversity

As interest rates rise, investing exclusively in the public markets stagnates investment portfolios with limited diversification options. Finding non-correlated alternative assets and debt securities in which to invest will reduce systematic risk and exposure. As an accredited investor, you have access to capital that non-accredited investors do not.

Here is an article that also discusses accredited investors.

Who Qualifies as an Accredited Investor?

The SEC requires accredited investors to possess a specific level of wealth, knowledge, income, and due diligence to invest in opaque financial securities. It is not easy to qualify as an accredited investor, which is another reason why it is highly prized.

You may qualify as an accredited investor if you meet the following requirements:

  • Requirement 1 . Possess professional certifications or credentials or work as a knowledgeable employee at a private fund.
  • Requirement 2 . Have a net worth that exceeds $1 million, excluding the value of your primary residents, as an individual or with a spouse.
  • Requirement 3 . Earn above $200,000 per year individually or $300,000 with a spouse with a two-year lookback period and demonstrate the ability to maintain these thresholds for the remaining year.

As you can see, there are very stringent financial and professional requirements. Ensure that you discuss your situation with securities lawyers if you are wondering about your qualifications. You can learn more about qualifying as an accredited investor here .

Learn about investor rights agreements .

Meet some lawyers on our platform

Randy M.

29 projects on CC
CC verified
View Profile

Steven S.

71 projects on CC
CC verified
View Profile

Dolan W.

1029 projects on CC
CC verified
View Profile

Allen L.

101 projects on CC
CC verified
View Profile

How to Become an Accredited Investor

There are specific criteria and standards that you must meet to become an accredited investor. The SEC recently passed new rules that make the qualification process more accessible. You must pass two specific tests to become an accredited investor and receive approval.

Here is a step-by-step process that shows you how to become an accredited investor:

Step 1. Meet Specific Financial Requirements

The most direct way to become an accredited investor is to have a net worth that exceeds $1 million or earns at least $200,000 per year . Firms will consider individuals with spouses who collectively have a pre-tax income of $300,000. Couples also need to pass the $1 million net worth threshold, not including their primary place of residence.

Learn about statements of net worth .

Step 2. Pass the Knowledge Test

There are two types of knowledge tests used to qualify as an accredited investor. These types include specific credentials or knowledgeable employee status. The qualifications necessary for your situation will vary according to your employment or credentialing.

Here is a closer look at the two types of knowledge tests below:

Credentials and Certifications

You must pass the knowledge test to become an accredited investor. Possessing specific professional credentials, certificates, and more from a high-education or accredited institution, such as Financial Industry Regulatory Authority (FINRA) , will help you earn accredited investor status. With the proper certification and knowledge, accredited investors can carry out investments for other individuals and entities.

Knowledgeable Employee Test (Private Funds Only)

Private fund employees can qualify under the knowledgeable employee designation. Knowledgeable employees serve in a high capacity over a private fund or affiliate, such as a director, executive officer, partner, or trustee. These individuals can be employees who participate in investment activities of their employer for at least 12 months.

Step 3. Obtain Accredited Investor Documentation

Proving your accredited investor qualifications starts with careful documentation. Here are some documents that you may need to obtain to verify your status:

  • Financial statements
  • Bank account statements
  • Credit reports
  • Tax returns and documents
  • FINRA certifications

Your primary residence’s value is not something you can include in your net worth report. However, you may add investment properties and vacation homes as long as you can verify ownership and valuation. The financial firm reviewing your submitted documents will accept or deny your accredited investor status.

Step 4. Apply to Become an Accredited Investor

The SEC requires accredited investor issuers to verify that an accredited investor meets the requirements above concretely. This process does not skim over self-affidavits and forms to check off items on a list. Instead, issuers use verification methods to confirm their status.

Two types of verification may occur, including individual and entity verification, as described below:

Type 1. Individual Verification

An individual can prove their qualifications by providing their tax documents for income over the last two years. Bank statements and accounts can help issuers understand more information about the subject’s finances. The issuer can request any type of documentation necessary to determine their eligibility and status.

Type 2. Entity Verification

Entity verification involves locating assets and investments by a bank or brokerage firm that maintains the accounts. These documents must fall within a 90-day time frame when going through the verification process. Verification methods can also confirm accredited investor status by identifying individuals of an entity and then pursuing the verification process for individuals.

Final Thoughts For Accredited Investors

Upon approval, you have valid accreditation for at least one year or until the following tax day. At this point, you are ready to invest in capital markets that matter to you. Financial services lawyers can help you manage your investments and protect your legal rights with convertible promissory notes , private placement memorandums, and other investment contracts .

Get Help from a Qualified Lawyer

Do you need help from a lawyer who specializes in investments?

Post a project in ContractsCounsel’s marketplace to receive flat fee bids from lawyers in our network. All lawyers are vetted by our team and peer-reviewed by customers for you to explore before hiring.


ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.


Meet some of our Lawyers

Brad T. on ContractsCounsel
View Brad
5.0 (4)
Member Since:
August 21, 2023

Brad T.

Founder & Principal
Free Consultation
South Carolina
14 Yrs Experience
Licensed in SC
Charlotte School of Law (Juris Doctorte)

William Bradley Thomas, or Brad, is a seasoned attorney in South Carolina, offering expert counsel to both emerging and established businesses and individuals. His specialties encompass alcohol licensure, asset protection, business law, Counsel on Call Concierge Legal Service™, estate planning, NFA firearms trusts, legal research, and document review. Brad’s unique approach is informed by his rich experience and diverse background. Not only is he a devoted father to three daughters (Anna, Kate, and Jessica), but he also served as the assistant Oconee County, South Carolina attorney. A pioneer in the local industry, he co-founded Carolina Bauernhaus Brewery & Winery, the state’s first farmhouse brewery and winery. His other roles have included membership in the South Carolina Bar Association’s House of Delegates, a board member of the South Carolina Brewers Guild, and an affiliate member of the same organization. Moreover, Brad is a certified Design for Six Sigma (DFSS) Green Belt and has accumulated over a decade’s worth of experience conducting onsite audits and financial analyses on domestic and international secured credit transactions, totaling over $5 Billion across diverse industries. With such a comprehensive skill set, Brad can provide sound legal and business advice that can help you manage and expand your business operations effectively. He can assist with selecting and establishing the most appropriate legal entity for your company, securing and retaining federal and South Carolina alcohol licensure, securing company incentives, and drafting, reviewing, and negotiating favorable contracts. All these services are designed to minimize risk and maximize both earnings and tax savings. Brad also offers estate planning services. Recognizing that life’s ups and downs can sometimes distract from ensuring that your loved ones are well taken care of, Brad applies the same legal and business fundamentals to his estate planning practice. These services include the preparation of wills, NFA firearms trusts (gun trusts), power of attorneys, and advance directives. So when your day at the office is over, you can relax, knowing that your business is running smoothly and your family’s future is secure, thanks to a tailored estate plan. If you’re seeking a trusted ally to guide you in business and personal legal matters, contact Brad Thomas at bthomas@scattorneysatlaw.com or review his firms website at www.scattorneysatlaw.com and discover how he can help you confidently navigate and enjoy all aspects of your life!

Recent  ContractsCounsel Client  Review:
5.0

"Brad was responsive, professional and very helpful. I would definitely recommend him."

Daehoon P. on ContractsCounsel
View Daehoon
4.8 (207)
Member Since:
November 26, 2021

Daehoon P.

Corporate & M&A | Venture Capital, Private Equity & Web3 Counsel | Real Estate Transactions
Free Consultation
New York, NY
10 Yrs Experience
Licensed in NY
American University Washington College of Law

Corporate, M&A & Securities Lawyer | Managing Attorney, DP Counsel PLLC Practice Areas: Business Formation | Commercial Contracts | Contract Drafting & Review | Mergers & Acquisitions | Venture Capital | Securities Offerings | Franchise Law | Employment & Equity Compensation | Intellectual Property | Cross-Border Transactions About/Bio: I represent companies, investors, and fund sponsors in corporate transactions, commercial contracting, and private securities matters, from entity formation and early-stage financings to acquisitions, exits, and ongoing strategic counsel. As Managing Attorney of DP Counsel PLLC, I help clients structure transactions clearly, allocate risk thoughtfully, and move deals forward with documentation that is practical, enforceable, and aligned with business objectives. My practice includes both day-to-day commercial matters and more complex transactional work, including venture financings, private offerings, M&A deals, fund-related documents, and cross-border structuring. What I Do: Corporate & Commercial • Entity formation and structuring for corporations, LLCs, and limited partnerships • Operating agreements, shareholder agreements, and governance documents • Commercial contract drafting, review, and negotiation • Vendor, distribution, manufacturing, SaaS, and licensing agreements • Employment, consulting, confidentiality, and equity compensation agreements • Outside general counsel support for growing companies Securities & Private Capital • Private offerings under Regulation D and Regulation S • Private placement memoranda, subscription agreements, and investor documents • SAFE, convertible note, and priced equity financings • Venture capital and private fund formation matters • Fund governing documents and offering document packages • Securities law analysis for private capital raising transactions Mergers & Acquisitions • Letters of intent and term sheets • Stock purchase, asset purchase, and merger agreements • Due diligence coordination and transaction support • Disclosure schedules, closing documents, and post-closing matters • Earnouts, rollover equity, indemnity structures, and related deal terms • HSR, CFIUS, and related regulatory issue spotting for qualifying transactions Digital Assets & Emerging Technologies • Federal-law digital asset and token securities analysis • Entity structuring for blockchain and Web3 ventures • Digital asset fund and operating structures • AML/KYC documentation support and regulatory issue spotting Franchising • Franchise Disclosure Documents (FDDs) • Franchise agreements • Master franchise and area development agreements • Franchise structuring and registration coordination Real Estate Transactions • Commercial real estate acquisitions and dispositions • Real estate joint ventures and syndications • Commercial lease drafting and negotiation • Real estate investment structures and related offering documents Cross-Border & International • U.S. market entry and entity structuring for international clients • Delaware and multi-entity holding structures • Cross-border transaction planning and documentation • Coordination with foreign counsel and tax advisors on cross-border matters Why Clients Hire Me: • Big-law-level drafting with boutique responsiveness • Practical, business-focused advice grounded in execution reality • Clear scoping and transparent fee arrangements • Experience across financings, acquisitions, fund formations, and cross-border transactions Typical Projects: • Contract drafting and negotiation • Entity formation and governance packages • Private offering document suites • Venture financing documentation • M&A transactions from LOI through closing • Fractional or outside general counsel support Industries Technology | SaaS | FinTech | Digital Assets | E-commerce | Healthcare | Real Estate | Food & Beverage | Professional Services

Recent  ContractsCounsel Client  Review:
5.0

"Great to work with. Covered all our needs and responded quickly when we had revisions and questions."

Darryl S. on ContractsCounsel
View Darryl
5.0 (137)
Member Since:
November 9, 2023

Darryl S.

Founder and Counselor-at-Law
Texas
33 Yrs Experience
Licensed in TX
The University of Texas School of Law Austin

I offer flat/fixed fees rather than hourly work to help lower your legal costs and align our interests. I specialize in contract law and focus on making sure your contract is clear, protects your interests and meets your needs. You can expect fast, straightforward communication from me, making sure you understand every step. With my experience, you'll get a detailed review of your contract at a fair, fixed price, without any surprises. I have over 30 years of business and legal experience that I bring to your project. I graduated from The University of Texas School of Law with High Honors in 1993 and practiced at Texas' largest law firm. I have founded companies and so understand how to be helpful as both a lawyer and business owner.

Recent  ContractsCounsel Client  Review:
5.0

"Had a great experience working with Darryl. He was thoughtful, direct, responsive, and most importantly able to quickly understand a complex business and regulatory structure without overcomplicating things. Really appreciated his practical approach and ability to explain things clearly. Highly recommend."

Robert W. on ContractsCounsel
View Robert
Member Since:
November 16, 2023

Robert W.

Registered IP Attorney
Free Consultation
Durham, NC
15 Yrs Experience
Licensed in NC
Campbell University - Norman Adrian Wiggins School of Law

I am an experienced Intellectual Property attorney registered with the USPTO and have managed my solo practice for over a decade. As part of my practice, I handle trademark and patent concerns for my clients. I’ve performed extensive prior art searches, drafted patent applications, and prosecuted patents across a broad range of technologies. I've helped my clients secure protection for both standard character and special form marks across a a variety of classes from candles to dog collars. I believe, as an IP attorney, that I can facilitate the development of new technologies by protecting your rights from infringement or helping you enter the market by establishing those rights from the ground up. More importantly, I believe it should be an open and affordable process that’s accessible to anyone pushing the bounds of innovation.

LaKesha S. on ContractsCounsel
View LaKesha
Member Since:
November 11, 2023

LaKesha S.

Managing Partner
Free Consultation
Montgomery, Alabama
21 Yrs Experience
Licensed in AL
Thomas Goode Jones School of Law

I am LaKesha B. Shahid, managing partner of Shahid & Hosea LLC. We focus primarily in domestic relations. We strive to make our clients our top priority.

Starcee R. on ContractsCounsel
View Starcee
Member Since:
November 14, 2023

Starcee R.

Managing Partner
Free Consultation
Altamonte Springs, FL
10 Yrs Experience
Licensed in FL
Stetson university

Mrs. Rivera graduated from Palmetto High School in 2009 and went on to attend Florida State University in Tallahassee, FL. After graduating from Florida State University with a B.S. degree in Criminology and a minor in Philosophy in April 2012, she went on to attend the University of Central Florida where she earned a M.S. Degree in Criminal Justice in August 2013. That same month, She started law school at Stetson University College of Law. ​ While in Law school, Mrs. Rivera participated on Stetsons #1 Trial team. In May 2016, Mrs. Rivera graduated with her law degree and in December 2016, Mrs. Rivera obtained her Masters in Law from Stetson University through its Joint J.D./LL.M degree in Advocacy program. Mrs. Rivera was a part of the first graduating class for this joint program at Stetson University. ​ As a Law student, Mrs. Rivera was a law clerk at a well-known plaintiffs employment law firm in Tampa, FL and also interned for the Honorable Judge Edward Larose of the Second District Court of Appeal where she was able to draft PCA opinions draft legal opinions that were ultimately published. Mrs. Rivera also went on to participate as a Certified Legal Intern (CLI) with the 6th Judicial Circuit Office of the Public Defender in Pinellas County, FL and an Intern for LegalAid of Manasota in Sarasota, FL. ​ After Law School, Mrs. Rivera began her legal career working as a Public Defender with the Ninth Judicial Circuit Office of the Public Defender in Orlando, FL. During her time as a Public Defender, Mrs. Rivera litigated more than 20 trials, representing both adults and juveniles accused of Misdemeanor and Felony offenses. After engaging in extensive civil, criminal and family law litigation, Mrs. Rivera decided it was time to finally open Allstarr Legal, P.A. in order to provide both affordable and quality legal representation to the people of the State of Florida. Mrs. Rivera practices throughout the entire state of Florida.

Francine L. on ContractsCounsel
View Francine
Member Since:
November 15, 2023

Francine L.

Legal Counsel
Free Consultation
New York, New York
38 Yrs Experience
Licensed in NY
Quinnipiac University School of Law

I am a multi-degreed attorney with more than 17 years of criminal trial experience and more than 15 as a general legal consultant. I'm licensed to practice in New York State.

Find the best lawyer for your project

Browse Lawyers Now

See Real Investment Contract Projects

Nevada Draft an investment contract for my business Drafting
  • Nevada
  • 3 lawyer bids
  • $500 - $1,995
View Details
Illinois Investment contract Drafting
  • Illinois
  • 5 lawyer bids
  • $1,000 - $2,250
View Details
Florida Maseco Master Service Agreement Review
  • Florida
  • 6 lawyer bids
  • $695 - $2,000
View Details
Texas investment Drafting
  • Texas
  • 2 lawyer bids
  • $475 - $850
View Details
Wyoming Review Investment Fund Contract Review
  • Wyoming
  • 11 lawyer bids
  • $325 - $1,800
View Details
Delaware Review Operating Agreement for Delaware Drafting
  • Delaware
  • 6 lawyer bids
  • $700 - $1,500
View Details

See all Investment Contract projects

Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.

View Trustpilot Review

Need help with an Investment Contract?

Create a free project posting
Clients Rate Lawyers 4.9 Stars
based on 20,113 reviews
CONTRACT LAWYERS BY TOP CITIES
See All Business Lawyers
ACCREDITED INVESTOR LAWYERS BY CITY
See All Accredited Investor Lawyers

Contracts Counsel was incredibly helpful and easy to use. I submitted a project for a lawyer's help within a day I had received over 6 proposals from qualified lawyers. I submitted a bid that works best for my business and we went forward with the project.

View Trustpilot Review

I never knew how difficult it was to obtain representation or a lawyer, and ContractsCounsel was EXACTLY the type of service I was hoping for when I was in a pinch. Working with their service was efficient, effective and made me feel in control. Thank you so much and should I ever need attorney services down the road, I'll certainly be a repeat customer.

View Trustpilot Review

I got 5 bids within 24h of posting my project. I choose the person who provided the most detailed and relevant intro letter, highlighting their experience relevant to my project. I am very satisfied with the outcome and quality of the two agreements that were produced, they actually far exceed my expectations.

View Trustpilot Review

Need help with an Investment Contract?

Create a free project posting
Clients Rate Lawyers 4.9 Stars
based on 20,113 reviews

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call

Find lawyers and attorneys by city