Accredited investor information: What you need to know
Do I need to be an Accredited Investor to sign up on EquityZen?
No, you do not need to be an Accredited Investor to sign up on EquityZen. However, in order to invest in EquityZen's offerings through an EquityZen fund, you will need to be an Accredited Investor, per the SEC definition.
Can non-accredited investors invest?
EquityZen offers private offerings, open to accredited investors only. While some platforms offer non-accredited investors the opportunity to invest (such as under the JOBS Act’s Reg. A+ or Reg. CF), EquityZen does not.
How do I verify my accreditation status?
EquityZen conducts private placement transactions in compliance with Rule 506(b) of the SEC's Regulation D.
Our regulatory oversight allows for self-verification that you are an Accredited Investor. When you’re signing up with EquityZen and establishing your account, you are representing that you are an Accredited Investor or Qualified Purchaser.
To verify your accredited status, investors are required to fill in (a) EquityZen's Accredited Investor Questionnaire, (b) EquityZen's Investment Suitability Questionnaire, and (c) a binding representation from you regarding your status. This questionnaire is required annually to ensure eligibility is up to date.
We do not currently require additional documentation such as income tax returns and salary verification letters.
Why Do I Have to Confirm My Accredited Investor Status?
EquityZen provides access to pre-IPO companies via single-company and multi-company investment offerings. To invest in EquityZen’s offerings through an EquityZen fund, you must be an accredited investor, as required by the SEC (Regulation D). Simply sign up and confirm your accredited investor status.
What Individuals are Accredited Investors?
For individuals, accredited investors have historically been defined by the SEC as anyone who has:
annual income of $200,000 or more (or $300,000 or more jointly with a spouse) in each of the last two years, and reasonably expects the same for the current year, OR
has a net worth of $1 million or more (either alone or with a spouse), excluding the value of the person's primary residence. Details regarding the accredited investor net worth standard may be found here
Effective December 8, 2020, “spousal equivalents” may be considered in the calculation of joint income or net worth. An accredited investor also now includes anyone who:
holds in good standing one or more of the following professional designations or credential that the SEC has designated as qualifying an individual as an accredited investor:
General Securities Representative license (Series 7);
Investment Adviser Representative license (Series 65); or
Private Securities Offerings license (Series 82)
is a "family client" of a "family office" whose investment is directed by the family office, OR
is a "knowledgeable employee" or officer or director of the issuer of the securities (or affiliated manager), where the issuer is a private fund relying on Sections 3(c)(1) or 3(c)(7) of the Investment Company Act of 1940.
For information about legal entities qualifying as Accredited Investors, please click here.
What Entities are Accredited Investors?
For entity investors, the SEC defines an accredited investor as:
a corporation, partnership, LLC or other entity described in Section 501(c)(3) of the IRS Code, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5 million;
a "family office" not formed for the purpose of acquiring the specific securities offered, with assets under management in excess of $5 million, and whose investment is directed by a person who has sufficient knowledge and experience in financial and business matters so that the family office is capable of evaluating the merits and the risks of the prospective investment;
any entity of a type not listed in any other category set forth by the SEC, not formed for the specific purpose of acquiring the securities offered, and owning investments in excess of $5 million;
an entity, other than a trust, in which all equity owners are accredited investors as described in one or more categories set forth by the SEC;
a broker or dealer;
an investment adviser registered under section 203 of the Investment Advisers Act of 1940 or registered under the laws of a US state;
an investment adviser relying on the exemption from registration with the SEC under either sections 203(l) or 203(m) of the Investment Advisers Act of 1940;
a trust, with total assets in excess of $5 million, not formed for the purpose of acquiring the specific securities and whose investment is directed by a person who has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the prospective investment; or
a revokable grantor trust, that may be amended or revoked at any time by the grantors thereof, and all of the grantors are accredited investors.
For more entity types that qualify as Accredited Investors, please click here. For information on how individuals qualify as Accredited investors, please click here.
What other kinds of entities qualify as Accredited Investors?
Other options for an entity to qualify as an Accredited Investor include:
a bank or savings and loan,
an insurance company,
an investment company registered under the Investment Company Act of 1940,
a business development company,
a Small Business Investment Company (as defined under Section 301(c) or (d) of the Small Business Investment Act of 1958),
a private business development company (as defined in Section 202(a)(22) of the Investment Advisers Act of 1940),
a Rural Business Investment Company (as defined in 384A of the Consolidated Farm and Rural Development Act),
an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974 (ERISA), with plan assets in excess of $5 million or with a plan fiduciary, as defined in Section 3(21) of ERISA, that is a bank, savings and loan insurance company or registered investment adviser, or if a self-directed plan, with investment decisions made solely by persons who are accredited investors described in one or more categories set forth by the SEC,
a plan, established by a state, its political subdivisions or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, with total assets in excess of $5 million.
For more information on the SEC's definition of an accredited investor, please click here and for SEC’s amendments to the definition, effective December 8, 2020, here.
Do non-U.S investors have to qualify as accredited investors as well?
Non-U.S. investors should review the standards for their home jurisdiction.
In order to invest in our offerings, you will need to be an accredited investor, per the SEC definition here. As an international investor, you will need to provide a copy of your passport, proof of residence, and a completed W-8 form following the transaction for our records.
Please contact us if you have questions at support@equityzen.com.
Can anyone other than a “spouse” be included in the calculation of net worth or income under the Accredited Investor definition?
Yes. Joint income and assets may be included from “spousal equivalents” when calculating income and determining net worth. The SEC views a spousal equivalent as a cohabitant occupying a relationship generally equivalent to that of a spouse.