Investor Toolkit

Accredited investor, in plain language

“Accredited investor” is a defined eligibility category used in parts of U.S. securities law. Depending on the offering exemption, it can affect who may participate. It does not mean the SEC has reviewed or endorsed the company or deal, that the investment is safe, or that it is appropriate for you.

The SEC describes several ways a natural person may qualify. For example, its published criteria include certain income tests—more than $200,000 individually, or $300,000 with a spouse or partner, in each of the prior two years with a reasonable expectation of the same in the current year—or net worth over $1 million, individually or jointly, excluding the primary residence. Specific professional licenses and other defined relationships can also qualify. These are summaries, not a self-certification: read the SEC’s accredited-investor guidance for the complete definitions and categories. The SEC page identifies itself as last reviewed or updated April 24, 2026.

An offering’s rules and verification process matter. Ask the issuer which eligibility category the offering relies on, what evidence it requires, and which documents control. Don’t assume that a salary, job title, visa, citizenship, or prior investment alone establishes eligibility. Rules and individual circumstances can change.

Eligibility is not suitability

Eligibility answers a narrow access question; suitability is a broader personal judgment. Consider whether you can bear a total loss without disrupting essential plans, how long the money could be unavailable, your emergency reserves and upcoming obligations, and how this exposure overlaps with your income, employer equity, home, and other investments. Diversification can reduce some concentration, but it cannot eliminate investment risk. For U.S.-resident Indian professionals, cross-border tax and legal questions may also depend on personal facts; get qualified, situation-specific advice where needed.

For a concise explanation of private-placement disclosure and liquidity risks, see the SEC’s private-placement investor bulletin.

Printable deal-review checklist

Use these prompts to structure a conversation and document review—not as a complete diligence process or a pass/fail test. Checkboxes work in this page; use your browser’s Print command to print it. Selections stay in your browser and are not submitted to the publication.

A short glossary

Angel

An individual who invests personal capital in an early-stage company, typically in exchange for a security or ownership interest. The actual instrument and rights depend on the documents.

SPV

A special-purpose vehicle: an entity formed for a defined purpose, such as holding an investment. An SPV adds its own organizer, costs, governing documents, and ownership chain; the acronym alone says nothing about its terms.

Fund

A pooled investment vehicle in which investors contribute under governing documents and an adviser or other manager makes decisions within a stated mandate. Fees, rights, and responsibilities vary by fund.

Carry

Short for carried interest: a share of profits that documents may allocate to a manager or sponsor, usually subject to specified conditions. The amount, calculation, and timing are document-specific—not a universal rate.

Dilution

A reduction in an existing holder’s percentage ownership when a company issues additional equity. The impact on economic value depends on the company’s financing terms and future results.

Liquidity

How readily an asset can be sold or converted to cash at an acceptable price. Private-company interests may have no ready market and can be subject to transfer restrictions.

Questions to ask before investing

Start with the question closest to your situation; the linked guides develop it in more detail.

• How is private-company ownership different from public shares—and what can I afford to leave invested?Venture investing, before the first cheque
• How much of my financial life already depends on the same company, employer, or technology theme?Your salary, your stock, and your next investment
• What exactly would I own, and who would make decisions for that interest?A startup, an SPV, or a venture fund?
• What do the SPV’s actual fees, rights, expenses, conflicts, and exit terms say?Twelve questions before you join an SPV
• What evidence supports the business thesis beyond the excitement around the technology?Reading an AI infrastructure investment thesis
• Does eligibility tell me anything about whether this risk fits my circumstances?If I qualify, does that mean I should invest?