What it is
An accredited investor is a designation under U.S. securities law for individuals or entities that meet specific financial criteria, such as an annual income over $200,000 ($300,000 for joint income) for the past two years, or a net worth exceeding $1 million (excluding primary residence). This status is intended to identify investors presumed to have sufficient financial sophistication and capacity to bear the risk of private, unregistered securities offerings that lack the same regulatory protections as public markets.
Many private investment opportunities, including venture capital funds, hedge funds, and certain crypto offerings, are restricted to accredited investors. Companies raising capital privately often rely on exemptions from SEC registration, such as Regulation D, which mandates that purchasers be accredited. This structure aims to protect less experienced investors from higher-risk, less transparent investments. News often covers debates about updating these thresholds or expanding access to private markets, reflecting ongoing policy discussions about investor protection versus investment opportunity.
Why it matters
This designation limits access to many private investment opportunities, including some crypto projects. Understanding it clarifies why certain deals are unavailable to you.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice