Accredited Investor: 2025 Requirements and Advantages
An accredited investor is a person or entity that is allowed to participate in investments not registered with the SEC.

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To qualify as an accredited investor, you must have over $1 million in net worth, or more than $200,000 in earned income in the past two calendar years, with the expectation of the same earnings.
Financial professionals with Series 7, 65 or 82 licenses also qualify.
The accredited investor designation is meant to protect retail investors from losses that can come with unregulated investments.
To purchase certain investments, you must be an accredited investor. But what does that mean, and how do you know if you qualify?
What is an accredited investor?
An accredited investor is a person or entity that is allowed to participate in investments not registered with the SEC. Accredited investors are typically high-net-worth individuals and companies with the means and experience to trade private, riskier investments.
According to the Securities and Exchange Commission, an individual accredited investor is anyone who:
Earned income of more than $200,000 (or $300,000 together with a spouse) in each of the last two years and reasonably expects to earn the same for the current year.
Has a net worth over $1 million, either individually or together with a spouse or spousal equivalent (excluding the value of a primary residence).
Is a "knowledgeable employee" of a private fund.
Is a financial professional who has Series 7, Series 65 or Series 82 financial securities licenses.
The rule is meant to help prove investors have the sophistication and means to invest in potentially riskier investments, as well as weather any losses.
How do you become an accredited investor?
There’s no certification offered to prove you’re an accredited investor. Instead, companies selling investments to accredited investors are required to take steps to verify you qualify.
That likely will mean you must provide financial statements — such as W-2s, tax returns, bank and brokerage statements — showing your current net worth is more than $1 million (your primary place of residence not included) or that you had income in the past two calendar years that qualifies.
Why do you have to be an accredited investor?
The accredited investor exemption seeks “...to ensure that all participating investors are financially sophisticated and able to fend for themselves or sustain the risk of loss, thus rendering unnecessary the protections that come from a registered offering,” the SEC says.
The rules regarding accredited investors are governed by SEC Rule 501 under Regulation D of the Securities Act of 1933, a government response to the Great Depression.
Also known as the “truth in securities” law, this act improved financial disclosure requirements so investors are informed about the investments they are buying. It also tightened rules prohibiting fraud and misrepresentation in the sale of securities.
» MORE: Ways to protect your assets
Types of investments that usually require accredited investors
Hedge funds
Since hedge funds can invest in more speculative investments, they usually only accept accredited investors.
Private equity
Most forms of private equity investing, including angel investing, require accredited investors.
Online real estate investments
Some real estate crowdfunding platforms, such as Crowdstreet or EquityMultiple, are only open to accredited investors.
Venture capital and startups
Because venture capital funds do not require the same information disclosures as offerings registered with the SEC, they usually require accredited investors due to the higher risks.
Can nonaccredited investors invest?
Yes. Any publicly traded stock, bond, mutual fund or publicly traded real estate investment trust, or REIT, is available to any adult who opens a brokerage account.
Many of these investments are also available within retirement accounts, such as 401(k)s and individual retirement accounts.
The SEC requires these investment vehicles to meet various disclosure standards in order to help safeguard average investors. But remember, no investment is without risk, and you can end up losing some or all your principal investment.
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