Accredited Investor

An accredited investor is a legal term defined by the Securities and Exchange Commission (SEC) in Rule 501 of Regulation D. It means that an individual has over $1 million in net worth, or income over $200,000 in each of the last two years (or $300,000 with spouse) and reasonably expects to reach the same income level in the current year. There are many companies that operate under a Regulation D exemption (Rule 505 and 506) Meaning they sell their products exclusively to accredited investors.

Angel investors are typically accredited investors. Once an accredited investor makes an investment in a growth company they automatically become an accredited angel investor.