You’re reading an excerpt of The Holloway Guide to Raising Venture Capital, a book by Andy Sparks and over 55 other contributors. A current and comprehensive resource for entrepreneurs, with technical detail, practical knowledge, real-world scenarios, and pitfalls to avoid. Purchase the book to support the author and the ad-free Holloway reading experience. You get instant digital access, over 770 links and references, commentary and future updates, and a high-quality PDF download.
Definition Accredited investors are individuals, banks, corporations, or other institutions that hold unique investor status, because their accreditation is regulated by the Securities and Exchange Commission (SEC) and they meet net worth and income thresholds. Their status is based on asset thresholds (typically an individual net worth of more than $1 million or annual income more than $200,000 or $300,000 with spouse, for each of the last two years; or an entity with assets exceeding $5 million). Accreditation is meant to prevent unregulated investors from losing a meaningful percentage of their money on a risky investment.