Accredited investor

Definition

Someone the securities rules let you raise from privately.

Why It Matters

Raising search capital or filling an equity gap almost always means staying inside a private-offering exemption, and that exemption is written around who your money comes from rather than what you tell them. A check from a friend who does not qualify can unwind a raise long after it is spent, which is why the question gets asked before the wire and in writing.

In numbers: The usual tests are $200,000 of individual income, or $300,000 with a spouse, in each of the last two years, or $1M of net worth counted without the family home.