Term of the Day Thursday, October 23, 2014

accredited investor

Definition

The SEC designation for an individual or entity meeting any of the criteria listed below. Certain restricted offerings, limited partnerships, and angel investor networks are open only to accredited investors. SEC criteria: Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer or general partner of a general partner of that issuer. Any natural person whose individual net worth, or joint net worth with that person's spouse, at the time of his purchase exceeds $1,000,000. Any natural person who had individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year. Any trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase of the securities is directed by a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment. Any organization that was not formed for the purpose of acquiring the securities being sold, with total assets in excess of $5,000,000. And, any entity in which all of the equity owners are Accredited Investors. opposite of nonaccredited investor.

Use accredited investor in a sentence

Before being tabbed an accredited investor, I had to accomplish at least one item within the SEC's main criteria list.

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