The "Accredited Investor" standard is set by the SEC and defines who is able to invest in certain private securities offerings. The SEC web site contains the full definition of an Accredited Investor under U.S. law.
Most startups only raise money from accredited investors. All funds and SPV's on AngelList only raise money from Accredited Investors.
In general, you must meet one of the following definitions to qualify as an Accredited Investor:
- Individuals with annual income over $200K (individually) or $300K (with spouse or spousal equivalent) in each of the last 2 years and an expectation of the same this year
- Individuals with net assets over $1 million, excluding the primary residence (unless more is owed on the mortgage than the residence is worth)
- An institution with over $5 million in assets, such as a venture fund or a trust
- An entity made up entirely of accredited investors
- SEC- and state-registered investment advisers
- Exempt reporting advisers filing with the SEC
- Individual with certain professional certifications (Series 7, Series 65, and Series 82 license)
- "Family offices” with over $5 million in assets under management and their “family clients,” as each term is defined under the Investment Advisers Act
- Any entity with over $5 million in investments and that was not formed for the specific purpose of investing in the securities offered
- A rural business investment company (RBIC)
The accreditation requirements vary between countries, but to invest on the AngelList platform all investors must at least meet US accreditation requirements.
Non-U.S. investors should also review the standards under their local law. For example, the OSC web site contains the full definition of accreditation requirements that are also applicable to Canadian investors, which in general require meeting one of the following standards:
- Individuals with annual income over $200K CAD (individually) or $300K CAD (with spouse) in each of the last 2 years and an expectation of the same this year
- Individuals who, either alone or with a spouse, beneficially own financial assets having an aggregate realizable value that before taxes, but net of any related liabilities, exceeds $1 million CAD.
- Individuals who, either alone or with a spouse, have net assets of at least $5 million CAD