Accreditation Overview

What is an accredited investor?

An accredited investor is an individual or a business entity that is allowed to trade securities that may not be registered with financial authorities. They are entitled to this privileged access by satisfying at least one requirement regarding their income, net worth, asset size, governance status, or professional experience.

For more information see: Glossary: Accredited Investors

Am I accredited? 

In this article, we’ll go through the different types of accreditation and how they may apply.

Individual accreditation:

For an individual to be an accredited investor, they must meet a minimum income or net worth threshold, or be a holder of a Series 7, 65, or 82 license and in good standing.

To accredit it based on income, the individual must have an annual income exceeding $200k ($300k for joint income) for the last 2 years, with the expectation of earning the same or a higher income in the current year. An individual must have earned income above the thresholds either alone or with a spouse over the last 2 years. The income test cannot be satisfied by showing 1 year of an individual's income and the next 2 years of joint income with a spouse.

A person is also considered an accredited investor if they have a net worth exceeding $1M, either individually or jointly with their spouse, or if they hold a Series 7, Series 65, or Series 82 license and are in good standing.

You should select the descriptor that applies to you from options 1-3. It is important that you select the right accreditation requirement from the options presented during your onboarding process.

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Investing from a Trust

You can also invest on AngelList through an accredited trust. You will need to select the right type of trust you’re investing from during your onboarding. 

Trust Type: Revocable

  • All grantors are accredited investors themselves for having greater than $1M in net assets, excluding primary residences, or
  • The Trust has $5M in net assets

Documentation Needed:

  • [Recommended] Option 1: Letter from a licensed CPA or attorney, SEC-registered investment advisor, or broker to the trust (e.g. RIA or IARs; equivalent licensed foreign professionals are ok). 
  • Option 2: Provide AngelList attorneys the trust documents.

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Trust Type: Irrevocable

Trust must have $5M in net assets

Documentation Needed:

  • [Recommended] Option 1: Letter from a licensed CPA or attorney, SEC-registered investment advisor, or broker to the trust (e.g. RIA or IARs; equivalent licensed foreign professionals are ok). 
  • Option 2: Provide AngelList attorneys brokerage statements or other bank statements showing asset level.  Specifically, Bank statements, brokerage statements and other statements of securities holdings, certificates of deposit, tax assessments, and appraisal reports issued by independent third parties 

Investing from a Firm or Fund

You can also invest from an accredited corporate entity (a firm or fund) on AngelList.

For a business entity to be accredited, it must either:

  • Have assets exceeding $5M and not have been formed solely for the purpose of purchasing the securities offered (if the business entity has more than $25M in assets, the business entity would be further categorized as a “qualified purchaser”); OR
  • Consist exclusively of equity owners who themselves are accredited investors.

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IRA accreditation:
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The same criteria as individual accreditation apply here. You should only choose this option if you're investing through an IRA. For an individual to be an accredited investor, a person must have an annual income exceeding $200k ($300k for joint income) for the last 2 years, with the expectation of earning the same or a higher income in the current year. An individual must have earned income above the thresholds either alone or with a spouse over the last 2 years. The income test cannot be satisfied by showing 1 year of an individual's income and the next 2 years of joint income with a spouse.

 

Investing from a DAO

 

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