An person who is worth more than a minimum level (amount of wealth) or has an minimum level of income per year, making him eligible for participation in sophisticated types of investment. In the United States, and under the Securities and Exchange Commission (SEC) Regulation D (section 4(6)), an accredited investor has a minimum net worth of $1 million or annual income of more than $200,000. Such a status allows this person to invest in high risk investments (unregistered investment such as hedge funds) that are usually available only for sophisticated investors, i.e., those who have the financial resources to absorb large losses. For entities, the minimum net worth is $5 million.
December 22, 2023