accredited investor – n : This is a legal distinction of
a type of investor who is eligible to buy equity, mezzanine, or debt securities
in companies that are marketed privately (private placement), are not registered
with the SEC, and do not trade on a public market such as the NASDAQ or NYSE.
Accredited investors must be knowledgeable and sophisticated individuals or
institutions and must meet required minimum levels for assets under management
or net worth, which are different for individuals and institutions. The current
standard states that for an individual to qualify as an accredited investor,
she/he must have a net worth of at least $1.0 million and/or an average income
of $200,000 over the past three years. Consult an attorney prior to and during
the fundraising process to ensure that your company conforms to SEC
regulations.
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Adapted from "The CompanyCrafters Entrepreneur's Dictionary"
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