Due to SEC regulations, you must be an accredited investor to invest in startups. An accredited investor is defined under rules set by the US Securities and Exchange Commission. You can read the full SEC guidelines here.
Generally, you are an accredited investor if you meet one or more of the following criteria:
- Your net worth, either alone or with your spouse, exceeds $1 million, excluding your primary residence
- Your income for each of the last two years exceeded $200,000 and you reasonably expect similar income this year
- Your income for each of the last two years exceeded $300,000 with your spouse and you reasonably expect similar income this year.
- A trust with total assets greater than $5M whose investment is directed by a person with knowledge and experience in financial business, such that he or she is capable of evaluating the merits and risks of a prospective investment.
- A charitable organization, organization, or partnership with assets exceeding $5 million
You can read more about accreditation in our Education Center.