A term used by the Securities and Exchange Commission (SEC) under Regulation D to refer to investors who are financially sophisticated and have a reduced need for the protection provided by certain government filings.
1. A natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of their primary residence;
2. 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;
3. 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;
4. A charitable organization, corporation, or partnership with assets exceeding $5 million;
5. A director, executive officer, or general partner of the company selling the securities;
6. A business in which all the equity owners are accredited investors;
7. A bank, insurance company, registered investment company, business development company, or small business investment company;
8. A trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes;
9. Any entity in which all of the equity owners are accredited investors.