In private markets, one of the most common questions from new investors is whether accreditation is required. The short answer is: sometimes. The longer answer depends on what you’re investing in, how the deal is structured, and which regulations the offering falls under. Let’s break down when being an accredited investor is required, what it means, and where non-accredited investors still have opportunities to participate.

What Is an Accredited Investor?

An accredited investor is someone who meets specific income or net worth thresholds defined by the U.S. Securities and Exchange Commission (SEC). These standards are in place to ensure that individuals investing in high-risk private offerings have the financial sophistication—and financial cushion—to absorb losses.

As of 2024, you qualify if you meet at least one of the following:

• Annual income: $200,000 individually or $300,000 jointly for the last two years
• Net worth: Over $1 million, excluding your primary residence
• Licensure: Hold a Series 7, 65, or 82 financial license

When Accreditation Is Required

Accreditation is typically required when investing in:

• Private equity and venture capital funds
• Syndicates and SPVs (Special Purpose Vehicles)
• Reg D offerings (Rule 506(b) and 506(c))
• Hedge funds and private REITs

These investments are not registered with the SEC and are only available to accredited investors to comply with federal securities law exemptions.

[Related: What Is a Syndicate and How Does It Work? →]

When You Don’t Need to Be an Accredited Investor

There are still investment opportunities available to non-accredited investors, particularly in the following categories:

• Public markets (stocks, ETFs, mutual funds)
• Crowdfunding platforms under Reg CF (Regulation Crowdfunding)
• Some real estate platforms offering Reg A+ deals
• Employee equity (e.g., stock options in startups)

These investments are structured to be accessible to the broader public and are subject to different SEC regulations with more investor protections.

Why Accreditation Exists

The accreditation requirement exists to reduce regulatory burden for private issuers while limiting risk to less experienced investors. While well-intentioned, it creates a gatekeeping effect: wealth becomes the proxy for sophistication, excluding many capable but lower-net-worth individuals from high-upside opportunities.

The Direction of Change

In recent years, there have been growing calls to modernize the accredited investor definition. The SEC has expanded eligibility to include those with certain financial licenses, and there is ongoing debate about shifting the criteria to reflect knowledge over net worth.

As access to private markets expands, we expect to see more regulatory frameworks that open up these opportunities—particularly in crowdfunding, real estate, and early-stage investing.

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Final Thoughts

Yes, accreditation is still required for many private deals—but not all. If you’re not yet accredited, there are still smart, strategic ways to build your portfolio while staying within legal limits. And if you are accredited, it’s critical to understand the responsibility that comes with that access.