How can I be verified as an Accredited Investor as an Individual?
An individual may be verified as an Accredited Investor through any of the verification methods noted below:
1. 3rd Party Professional Letter Method-
You have a letter dated within the last 90 days from a third party licensed attorney, a CPA, an SEC-registered investment adviser, or a registered broker-dealer certifying that you are accredited. As the SEC requires specific wording for this letter, we have a template letter available for you online when you select this option.
2. Income Method-
The income test requires that you have income exceeding $200,000 USD in each of the two most recent years and a reasonable expectation of the same income level in the current year. Alternatively, you could try to qualify with your spouse or spousal equivalent, if you have one. If your joint income with a spouse or spousal equivalent exceeds $300,000 USD for those years with a reasonable expectation of the same income level in the current year, then both you and your spouse or spousal equivalent would qualify as accredited investors. Evidence of the income should be supported by official tax records such as US tax returns, W-2, K-1, 1099, or other government documents, if possible. If that type of official documentation is not available, you may be able to provide evidence through earnings statements, pay stubs, a letter from your employer certifying your income, or perhaps bank statements that show that you receive that income.
3. Net Worth Method-
For the net worth test, you (or you and a spouse or spousal equivalent) must show enough assets to evidence a net worth of at least $1,000,000 USD ignoring the value of your primary residence and after discounting all your other liabilities (including liabilities exceeding the value of your primary residence and liabilities incurred on your primary residence within the last 60 days). To guide you on the asset evidence you need to provide, please see the below asset evidence chart.
| Type of Asset | How To Prove | Notes |
|---|---|---|
| Real estate (Primary residence) | Not applicable. The positive value of a primary residence does not count toward net worth for accredited investor purposes. | Liabilities incurred in the last 60 days against a primary residence and liabilities exceeding the value of the primary residence detract from the net worth for accredited investor purposes. |
| Real estate (NOT primary residence) | Show deed or other evidence, such as assessor records, to prove ownership. To prove value, obtain appraisal or price opinion letter from real estate broker or valuation professional. Tax assessor valuations may be used, but often undervalue assets. | The value of real estate that is not a primary residence may be counted toward net worth for accredited investor purposes, but all liabilities on such real estate should be disclosed and will be deducted from net worth. Appraisals are the best evidence, but may be costly. Many real estate professionals will provide price opinions for free. Reasonably reliable computer generated valuation reports (such as Zillow's Zestimate) may be acceptable. |
| Bank accounts, certificates of deposit (CD's), brokerage, and other deposit or securities accounts | Show latest statement or get letter from the financial institution indicating value of account. Statement or letter should show the investor's name or investor should otherwise prove ownership of the account. | It is not necessary to show social security numbers, full account numbers, or individual positions. Identifcation of the account, account ownership, and value of the total assets should be sufficient in most cases. If an account contains a liability, disclose that liability so that net asset value can be determined. |
| Private Company Securities | The best evidence is to provide a formal valuation from a valuation professional or an accountant. If a formal valuation is not available, obtain a statement from the company as to reasonable fair market value. | If the valuation is provided by the company, the reviewer may want to confirm that the valuation was provided in an unbiased manner. The reviewer may choose not to accept a valuation if the reviewer has any reason to question the validity of the valuation. |
| Annuities, Insurance, and Similar Assets | These types of assets sometimes have a cash value. Provide the latest statement or a letter from the financial institution indicating the cash value. | |
| Vehicles (e.g. automobiles, yachts, etc.) | Privide a copy of the vehicle title that identifes the vehicle and owner. Provide a valuation from a valuation professional. In some cases, standardized pricing manuals, such as Kelley Blue Book prices for automobiles might be used. | |
| Personal Property | Provide evidence of ownership of the personal property as best as possible. Provide an objective third-party valuation of the personal property | Personal property is difficult to verify. Different valuations may be necessary for different assets. Reviewers may not accept personal property as evidence if they cannot confirm ownership or value. |
Investors also need to provide 3rd party liability evidence by submitting a copy of their credit report (no older than 90 days). You may obtain your credit report through any of the following options: 1) Order one free credit report from any of the credit reporting bureaus from https://www.annualcreditreport.com (on that site, we recommend requesting your report from either Equifax or TransUnion where you can download a PDF copy); 2) For a faster, simpler process, authorize VerifyInvestor.com to generate a credit report from TransUnion (for a $5 fee, payable when you select this option); 3) Order a credit report from Experian Connect℠.
Note that if you are verifying together with a spouse or spousal equivalent, both individuals must provide a credit report, if only one spouse or spousal equivalent is being verified, then the need for an additional credit report will be determined by your reviewing attorney.
4. License Holders Method-
A natural person holding General Securities Representative (Series 7), Private Securities Offerings Representative (Series 82), or Licensed Investment Adviser Representative (Series 65) registration in good standing. For Series 7 and Series 82, the reviewing attorney needs to ensure that the investor is currently working for a FINRA-member or SRO firm, or is within 2 years since they were either terminated or left a firm and has not yet found employment with a FINRA-member). For Series 65, the investor may qualify as long as they are registered with a State to be in good standing. For this verification method, you simply need to enter your name as it appears on your license, your individual CRD#, and for Series 7 and 82 only, the name of the firm you are licensed through. Please see this link for additional guidance.
5. Insider Method-
A director, executive officer, or general partner of the issuer of the securities being offered or sold, or a director, executive officer, or general partner of a general partner of that issuer. Note that this accreditation verification is limited to the issuer’s current offering only.
Evidence for this verification may be either an Incumbency Certificate or an Officer's Certificate no more than 90 days old).
6. Knowledgeable Employee Method-
A “Knowledgeable Employee” of a private fund, but only for investments in that fund. Knowledgeable Employee is: (i) an executive officer, director, trustee, general partner, advisory board member, or person serving in a similar capacity, of the private fund or an affiliated management person of the private fund; or (ii) an employee of the private fund or an affiliated management person of the private fund (other than an employee performing solely clerical, secretarial or administrative functions with regard to such company or its investments) who, in connection with his or her regular functions or duties, participates in the investment activities of such private fund, other private funds, or investment companies the investment activities of which are managed by such affiliated management person of the private fund, provided that such employee has been performing such functions and duties for or on behalf of the private fund or the affiliated management person of the private fund, or substantially similar functions or duties for or on behalf of another company for at least 12 months. Note that this accreditation verification is limited to the issuer’s current offering only. Evidence for this verification may be either an Incumbency Certificate or an Officer's Certificate no more than 90 days old)
7. Special Situation-
This is a seldom-used option as it is designed to be used by either publicly traded entities or by individuals who are extremely famous for being rich, to the extent that they do not need to go through the usual verification process, for example, Warren Buffet. If you believe you are in this category, please contact support@verifyinvestor.com and let us know so that we may provide additional guidance.
Please note that the verification reviews are conducted by independent, licensed attorneys that VerifyInvestor.com does not control or influence. Therefore, what constitutes sufficient evidence is subject to their professional judgment.
