Accredited Investor
Secondary & Pre-IPO Markets
Definition
An investor eligibility category under U.S. securities rules used for many private offerings. Individuals commonly qualify through income, net worth, or certain professional credentials; entities may qualify through assets, ownership, or regulated status.
Why it matters
Many pre-IPO SPVs, feeder funds, private credit funds, and alternative platforms rely on Regulation D exemptions that limit participation to accredited investors. Accreditation is an access gate, not a quality screen or risk control.
Common misconceptions
- •Accredited investor status does not mean the investment is suitable.
- •Accreditation does not imply SEC review or approval of the offering.
- •Some offerings require the higher qualified purchaser standard in addition to or instead of accreditation.
Technical details
Verification
Rule 506(c) offerings require issuers to take reasonable steps to verify accredited status. Rule 506(b) offerings may rely more heavily on investor representations but restrict general solicitation.