Accredited Investor
Private Equity glossary · Private Equity Fundamentals
Definition
An individual or entity meeting SEC wealth or income thresholds permitting investment in private funds.
Accredited Investor in plain English
An accredited investor is a person or organization the government (the SEC) considers wealthy or sophisticated enough to invest in riskier, less-regulated deals — like private funds that aren't sold to the general public. You qualify by clearing certain bars, such as high income or high net worth, the idea being you can afford to lose the money and understand what you're getting into. Think of it as a velvet rope: these private investments skip a lot of the safety disclosures that public stocks require, so only people presumed able to handle the risk are let past the rope.
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