An entity qualifies as an accredited investor under U.S. securities laws if it meets specific criteria set by the Securities and Exchange Commission (SEC). These criteria focus on the entity’s structure, assets, or the financial sophistication of those managing or backing it.

Entities That Qualify as Accredited Investors

Here are the main categories of qualifying entities:

1. Entities with Over $5 Million in Assets

• Includes corporations, partnerships, LLCs, trusts, 501(c)(3) organizations, and others.
• Must not be formed for the specific purpose of acquiring the securities offered.

2. Entities Owning Over $5 Million in Investments

• These entities may include:
  • Indian tribes
  • Governmental bodies
  • Bank-maintained collective investment trusts
  • Foreign entities
• Also must not be formed for the specific purpose of investing in the offering.

3. Banks, Insurance Companies, Registered Investment Companies

• Including:
  • Banks
  • Savings & loan associations
  • Registered broker-dealers
  • Insurance companies
  • Registered investment companies, business development companies, or small business investment companies (SBICs)

4. Investment Advisers and Rural Business Investment Companies (RBICs)

• Both SEC-registered and state-registered investment advisers now qualify.
• Exempt reporting advisers also qualify.
• RBICs are also explicitly included under recent changes.

5. Family Offices and Family Clients

• Family offices with:
  • At least $5 million in assets under management
  • A person making investment decisions with sufficient financial knowledge
• Their family clients can also qualify.

6. Entities Consisting Solely of Accredited Investors

• If all equity owners of an entity are accredited investors, the entity itself qualifies.

7. Trusts with Sophisticated Advisors

• Trusts not formed to acquire the offered securities, with assets over $5 million, and managed by a sophisticated person.

Interested in raising capital for your business, project or fund? Call us today to discuss! (720) 586-8610