Accredited Investor

To qualify as an accredited investor, an investor must either be: A) a financial institution; B) an affiliate of the issuer; or C) an individual with a net worth of at least $1 million or an annual income of at least $200,000, and the investment must not account for more than 20% of the investor’s worth. This can be very significant as SEC Regulation D stipulates that a maximum of 35 non-accredited investors are allowed to invest money into a Private Placement. An issuer of a private placement will try to acquire accredited investors to raise a greater amount of capital than would be possible if only 35 investors of less affluence could contribute.

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