Accredited Investor

Finance a la Shmoop. What is an accredited investor. Well the difference

between an accredited college and an unaccredited college, can be like you

know the difference between Princeton, and the school of Feel Good Energy, that

your great Aunt Bertha, set up in her garage last year. Yeah different kind of [woman dancing in garage with disco ball]

college. Well accredited investors work on a

similar idea. A bunch of someone's have come along and agreed that accredited

investors, have a bunch of qualifications. In other words they're legit. So

accredited investors are simply investors, who qualify to do a certain

investment. Usually accredited means, that they have credit, or assets, or wampum, or

knowledge, like intellectual capital, instead of financial capital, or along with

both. Which means that they're big boys and big girls, who are able to invest a

large amount of money, in a risky venture. Officially they're investors who have an

income of at least $200,000 for the past two years, three hundred thousand for [checklist for investors on chalkboard]

joint accredited investors, like married people or partners, or have a net worth

of at least a million bucks individually, or jointly, or our executives, partners, or

directors of the entity issuing those securities. Meaning raising the dough

itself. Institutional investors, such as mutual funds, hedge funds, and pension

funds, also fit the bill. Additionally entities can be considered

accredited, but their threshold is 5 million bucks in assets. By the way if [man talking on lawn]

all the owners of an entity, like a law firm or something like that, are

accredited, well then the entity is considered accredited

as well. So yeah they're accredited investors. Not to be confused with a

credited investor, who is really excited to have a small part in a movie. [guy in movie theater]