Non-Accredited Investor

DEFINITION of 'Non-Accredited Investor'

An investor who does not meet the net worth requirements for an accredited investor under the Securities & Exchange Commission's Regulation D. A non-accredited individual investor is one who has a net worth of less than $1 million (including spouse) and who earned less than $200,000 annually ($300,000 with spouse) in the last two years.

BREAKING DOWN 'Non-Accredited Investor'

When a company raises private equity for an investment, such as a new company or a hedge fund, it is able to receive unlimited investments from accredited investors. On the other hand, Regulation D stipulates only 35 non-accredited investors are allowed to invest money into a private placement.

RELATED TERMS
  1. Accredited Investor

    A term used by the Securities and Exchange Commission (SEC) under ...
  2. Net Worth

    The amount by which assets exceed liabilities. Net worth is a ...
  3. Regulation D - Reg D

    A Securities and Exchange Commission (SEC) regulation governing ...
  4. 3C7

    A portion of the Investment Company Act of 1940 that permits ...
  5. Private Placement

    The sale of securities to a relatively small number of select ...
  6. SEC Form D

    A filing with the Securities and Exchange Commission (SEC) required ...
Related Articles
  1. Investing Basics

    How to Become an Accredited Investor

    We offer a breakdown of how one qualifies to be an accredited investor and the best way to determine if you net worth is more than $1 million.
  2. Investing News

    Non-Accredited Investors: Make Money in Crowdfunded Investments

    The JOBS Act will soon afford non-accredited investors the opportunity to participate in crowdfunded investments under recently finalized Title III rules.
  3. Investing Basics

    Who is an Accredited Investor?

    Essentially, accredited investors are knowledgeable and experienced enough to handle the risk that comes with investing in unregistered securities.
  4. Investing News

    Do You Have What it Takes to Be an Accredited Investor If the Rules Loosen?

    The definition of accredited investor may expand if the Senate backs the House and approves the Fair Investment Opportunities for Professional Experts Act.
  5. Investing News

    My Mini-IPO: The Reality of Equity Crowdfunding

    Regulation A+, part of Title IV of the JOBS Act, has made equity crowdfunding a reality in the U.S. What does that mean for investors and entrepreneurs?
  6. Personal Finance

    The Best Ways to Invest $500 to $5,000

    Investing well on a smaller budget all comes down to knowing where the best places are to park your money.
  7. Investing News

    Crowdfunding Rule Lets Anyone Invest in Startups

    As of Monday, a belated provision of the 2012 JOBS Act goes into effect, allowing anyone and everyone to participate in fundraising for private companies and receive stakes in potentially high-growth ...
  8. Investing Basics

    Understanding Private Placement

    Private placement refers to offering and selling shares in a company to a small group of sophisticated buyers.
  9. Retirement

    Retirement Planning for the Non-Employed Spouse

    A stay-at-home spouse probably racks up more hours working than any office jockey. Make sure he or she is set up to save for retirement, as well.
  10. Term

    What High Net Worth Means

    A high net worth individual is someone with many liquid financial assets.
RELATED FAQS
  1. What is required to become an accredited investor in a private placement?

    Learn how the SEC defines accredited investors, and understand exceptions to the requirements for an accredited investor ... Read Answer >>
  2. What are the disclosure requirements for a private placement?

    Learn about the SEC rules for disclosure requirements in private placement offerings, and understand what type of information ... Read Answer >>
  3. Can foreign investors invest in US hedge funds?

    Understand whether foreign investors are permitted to invest in hedge funds that are based in the United States, and find ... Read Answer >>
  4. Under what circumstances would I require private wealth management?

    Learn why many high-net-worth individuals may prefer private wealth management services, and understand how these firms charge ... Read Answer >>
  5. What factors might make a private placement a risky investment?

    Learn about purchasing securities through a private placement investment, and understand the risk factors associated with ... Read Answer >>
  6. What does a hedge fund do?

    Read how hedge funds differ from other investment vehicles and how their investment strategies make them unique and potentially ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center