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.

  1. Equity

    Equity is the value of an asset less the value of all liabilities ...
  2. Hedge Fund

    An aggressively managed portfolio of investments that uses leveraged, ...
  3. Net Worth

    The amount by which assets exceed liabilities. Net worth is a ...
  4. Private Placement

    The sale of securities to a relatively small number of select ...
  5. Regulation D - Reg D

    A Securities and Exchange Commission (SEC) regulation governing ...
  6. Accredited Investor

    A term used by the Securities and Exchange Commission (SEC) under ...
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  1. Can mutual funds invest in private equity?

    Mutual funds can invest in private equity indirectly by buying shares of publicly listed private equity companies, such as ... Read Full Answer >>
  2. What does residual value represent in a private equity investment?

    It is common to see a private equity investment's net asset value, or NAV, referred to as its residual value, since it represents ... Read Full Answer >>
  3. How much, if any, influence do non-controlling interest shareholders have?

    Non-controlling interest shareholders do not typically have much influence. The level of influence can vary, however, depending ... Read Full Answer >>
  4. What are the pros and cons of holding a non-controlling interest in a company?

    Most investors hold a non-controlling interest – also known as a minority interest – of the companies in which they own shares. ... Read Full Answer >>
  5. What type of funding options are available to a private company?

    Similar to public companies, private companies also need funding for various reasons. A business typically needs the greatest ... Read Full Answer >>
  6. Which federal regulatory agencies approved and are now responsible for enforcing ...

    Five federal regulatory agencies approved and are jointly responsible for enforcing the Volcker rule. These agencies include ... Read Full Answer >>

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