Explainer
Accredited Investor
A person or entity allowed to invest in private deals
An investor who meets income or wealth tests set by regulators to buy private securities.
Many private investment opportunities are limited to accredited investors. In the United States, the rules are set by the securities regulator and are based on factors such as income, net worth or professional credentials.
The idea is that private deals carry more risk and less disclosure than public stocks, so access is limited to people considered better able to absorb a loss.
Requirements change over time and vary by country, so anyone considering a private investment should check the current rules that apply to them.
Illustrative explainers. Figures in examples are hypothetical.