An accredited or sophisticated investor is someone who meets specific financial thresholds set by securities regulators. These requirements exist to ensure that investors in private markets have the financial resources and knowledge to bear the higher risks involved.
US (SEC) requirements — meet any one
Individual income >$200,000 in each of the last two years (or $300,000 jointly with a spouse), with expectation of the same this year
Net worth >$1,000,000, excluding primary residence
Certain professional certifications (Series 7, Series 65, Series 82)
Director, executive officer, or general partner of the issuer
UK (FCA) requirements — "sophisticated investor"
Member of a network of business angels for at least 6 months
Made more than one investment in an unlisted company in the past 2 years
Currently working or have worked in the past 2 years in private equity or venture capital
Currently a director of a company with annual turnover of at least $1 million
Why does this matter?
Wealt is required by law to verify that investors meet these criteria before allowing them to invest in deals. This is done during the KYC (Know Your Customer) process. You can browse deals freely, but investing requires accreditation.