|
|
What Is An
"Accredited Investor?"
The SEC
considers some investors to be more qualified than others to make
risky investments. They are expected to be more financially experienced
and better able to withstand the loss of the investment. Special rules
apply to them, rules that can make it less expensive and more practical
for companies raising money. An "accredited investor" is:
-
a bank, insurance company, registered investment company, business
development company, or small business investment company;
-
an employee benefit plan, within the meaning of the Employee Retirement
Income Security Act, if a bank, insurance company, or registered
investment adviser makes the investment decisions, or if the plan
has total assets in excess of $5 million;
-
a charitable organization, corporation or partnership with assets
exceeding $5 million;
-
a director, executive officer, or general partner of the company
selling the securities;
-
a business in which all the equity owners are accredited investors;
-
a natural person with a net worth of at least $1 million;
-
a natural person with income exceeding $200,000 in each of the
two most recent years or joint income with a spouse exceeding
$300,000 for those years and a reasonable expectation of the same
income level in the current year; or
-
a trust with assets of at least $5 million, not formed to acquire
the securities offered, and whose purchases are directed by a
sophisticated person.
-
Cynthia Nemeth-Johannes
|
