Raising money · A term for founders abroad
What is an accredited investor?
An investor the SEC treats as able to bear private-company risk: over $200,000 income, or $1 million net worth excluding their home, among other tests.
Checked against the IRS's instructions and the states' own rules. Reviewed by Saais Patel, compliance reviewer.
Term 3 of 105 in the glossary, filed under A.SEC: accredited investors
Accredited investor, for a founder abroad.
Most startup rounds under Regulation D are sold only, or mainly, to accredited investors. For an individual, the SEC's main tests are:
- Income over $200,000, or $300,000 with a spouse or partner, in each of the last two years, expected again this year.
- Net worth over $1 million, alone or with a spouse or partner, not counting their main home.
- Holding a Series 7, 65 or 82 licence in good standing.
Selling to people who don't qualify brings disclosure duties and limits that most early rounds avoid. Your lawyer confirms each investor's status.
Sources: SEC: accredited investors.
What founders ask next.
- Can investors outside the US invest in my Delaware startup?
- Yes. Sales outside the US usually rely on a different SEC rule, Regulation S, and their own country's rules may apply too.
03 · See also
- Raising moneyForm DThe SEC notice a company files within 15 days of first selling securities under Regulation D, such as a SAFE round; filing it is free.Read the term
- Raising moneySAFEAn investment contract, published by Y Combinator, where an investor pays now for shares issued at a later priced round; used by US corporations.Read the term
- Raising money83(b) electionA founder's choice to be taxed on restricted stock when it's granted rather than as it vests, filed with the IRS within 30 days, with no extension.Read the term
- Raising moneyCap tableThe record of who owns what share of a company, including options, SAFEs and other convertible instruments; investors read it first.Read the term
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