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.

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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?

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  5. What is the difference between an IPO and a private placement?

    Learn the differences between private placements and initial public offerings that companies use to raise capital through ... Read Answer >>
  6. What factors might make a private placement a risky investment?

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