How to Become an Accredited Investor (It's Easier Now Than Ever)
How to Become an Accredited Investor (It's Easier Now Than Ever)

How to Become an Accredited Investor (It's Easier Now Than Ever)

Get access to the deals high net worth investors have been using to supercharge their wealth-building power.

Guy Ovadia

ByGuy Ovadia

Updated Sep 1, 2021

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When you first start investing, it's smart to stay within your comfort zone. But if you stay there for too long, only ever putting money into traditional investment vehicles like retirement accounts and index funds, you'll miss out on the opportunity to turn a profit on the wealth you've built.

Once you've built up a nest egg, branching into more potentially lucrative opportunities (like investing in startups or real estate investing) can bring the chance to earn outsized returns. Even if you only increase the average return on your investments by a single percentage point, it can mean bringing in hundreds of thousands of extra dollars over the course of your lifetime.

Unfortunately, a lot of these profitable investment opportunities are reserved for accredited investors. Becoming an accredited investor is like getting into the secret, roped-off room in Vegas where people play high-stakes. Bets are high, but if you get lucky, the rewards are even higher.

So how do you become an accredited investor? And is it worth it?

What is an accredited investor?

An accredited investor is a person who is permitted to make investments that are not registered with the U.S Securities and Exchange Commission (SEC). That means gaining access to investment opportunities that regular investors don’t have, like investing in private companies or private real estate investment trusts (REITs). 

These investments are limited to accredited investors because the SEC has deemed people who meet these requirements to be:

  1. Financially capable of withstanding significant loss, and/or
  2. Knowledgeable enough to navigate unregistered investments that might not be as transparent as publicly traded companies

Requirements to become an accredited investor

There are three different ways to meet the requirements of accredited investor status. You only need to fit one of the following descriptions.

  1. You have a net worth of $1 million.
    1. This can be your net worth alone or your net worth combined with a spouse.
    2. This excludes the value of your primary residence.
  2. You earn over $200,000 in income each year.
    1. You must have earned this much for the past two years and expect to earn that much or more in the current year.
    2. If you're combining your income with a spouse, you must earn over $300,000 per year.
  3. You have a Series 7, 65, or 82 license that's in good standing.
    1. Each of these licenses require you to pass an exam, and in some cases, you may also need to be sponsored by an employer to take the exam.


There is no formal registration process to become an accredited investor. Rather than registering with the SEC once you meet these requirements, you'll be asked by each investment vehicle to show proof of income, net worth, and/or credentials when you choose to invest in an opportunity that's only open to accredited investors.

It's getting easier to become an accredited investor—but is that a good thing?

You used to have to meet the net worth or income requirements to become an accredited investor, but in 2020, the SEC added the third option to meet the definition requirements by gaining a Series 7, 65, or 82 license. Employees of a private fund, state-registered and SEC-registered investment advisers can also become accredited. Recently, a new bill was introduced that would make becoming an accredited investor even easier: If it passes, the SEC will create a new exam anyone can take specifically to become an accredited investor.

Some are applauding the opportunity for everyday investors to gain access to these behind-closed-doors investment deals that were once reserved for the wealthy, but others are critical of the doors being opened too widely. 

While the licensing process proves you have the financial sophistication to navigate the murky waters of unregulated investment opportunities, the net worth and income requirements do serve an important purpose. These opportunities require large amounts of money being locked up, potentially for a long time, and they often involve high risk of loss. That's why some believe these deals should be reserved for people with enough cash flow to take a big loss or lose access to large sums of money for a while.

Why should I become an accredited investor? What can they invest in that I can't?

Becoming an accredited investor is more than just bragging rights or becoming part of an ‘exclusive’ club. That all-star investor status will get you access to a long list of investment opportunities for accredited investors that you couldn't take advantage of before, such as:

Investing in startups and private companies

Anyone can buy stock in a public company, but to invest in a private company (for example, to invest with a venture capital firm or become an angel investor in a startup), you need to be an accredited investor. Getting in on the ground floor with a company before it goes public is like getting a steep discount on their stock, and it can mean earning sky-high returns—but that's assuming the company actually takes off. Private equity is riskier than traditional investing, partially because there's a high chance of failure. Plus, these private opportunities might be less transparent about their financials as they don't follow the same SEC regulations that registered public investments do.

Investing in institutional-quality real estate projects

Accredited investors get access to a wider range of real estate investing opportunities, some of which are the crème-de-la-crème of real estate developments. These include massive commercial real estate projects like condo developments, malls, and resort hotels. You can often invest in these through crowdfunding platforms and private REITs that pool your money with other investors, so while the buy-in can still be high, it's not as steep as buying your own property.

Hedge funds 

Rich folks have long taken advantage of hedge funds to grow their wealth. These are actively managed investment funds that attempt to beat the market using more complex, hands-on investment techniques. Because these techniques are risky and complicated, you need to be an accredited investor to invest with most hedge funds.

The best investment opportunities for accredited investors

If you meet the accredited investor requirements and you've got your cash at the ready, here are some investment opportunities to take advantage of.

CrowdStreet (Best for big returns on real estate)

Real estate crowdfunding can give you high returns without having to purchase property and flip it or rent it out. Real estate platforms like CrowdStreet give you access to commercial real estate developers and businesses that are trying to raise capital. 

With CrowdStreet, you can choose an investment that fits your goals and pool your money with other investors, potentially achieving target returns of between 9% and 24%.

CrowdStreet

3.0

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Real Estate

Republic (Best for start-up investing, accredited or not)

Investing in a start-up can deliver seriously high returns if you choose the right one. These businesses are starting from scratch, so if they manage to scale, growth happens fast. You can start investing in startups via Republic whether you're accredited or not. 

This platform has investment opportunities for both accredited and non-accredited investors, with minimum investments ranging from $100 to $25,000. Less than 3% of start-ups applying to Republic pass the strict vetting process, so due diligence has largely been done for you. The rate of return varies depending on which project you invest in.

Republic

3.7

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Startups

FarmTogether (Best for US farmland investing)

Farmland investing platforms enable you to invest in a farm without having to purchase land and get down to the hard work by yourself. Adding farmland to your portfolio is a great way to diversify and protect your wealth, as it's an asset that generally performs well even during market downturns.

A platform like FarmTogether boasts US farms and crops that people can invest in, giving investors full control of their assets. You can grow your portfolio without worrying about inflation or public markets. Target returns could get you between 8% and 12%, and you can make money from both farm income (from crops and/or rent) and land value appreciation.

FarmTogether

4.7

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Farmland

PeerStreet (Best for peer to peer lending)

Lending cash to borrowers delivers a good rate of return with short to moderate liquidity. It also provides diversity for your overall portfolio.

PeerStreet combines crowdfunded real estate with peer to peer lending, offering investors a 7% to 12% rate of return. Only $1000 minimum investment is required, with automated investing available for reserving projects before they go live.

PeerStreet

Lending

EquityZen (Best for investing in big name companies pre-IPO)

Investing in private companies can get you a great deal on shares before the company goes public. EquityZen enables you to invest in technology companies, lifestyle brands, and more. 

Stripe, SpaceX and Postmates are just a few popular businesses you can invest in via EquityZen. If the business goes public, shares or cash will be distributed between all investors.

EquityZen

2.0

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Startups

Yieldstreet (Best for investing in a diverse array of assets)

Yieldstreet is open to both accredited and non-accredited investors, but accredited investors have access to a wider range of real estate deals. This app allows you to invest in a diverse array of alternatives that includes private equity, art, venture capital, private credit, real estate, legal finance and more.

There are three main investment fund: a growth fund that offers returns via capital appreciation, a balanced fund that offers returns via both capital appreciation and current income, and an income fund that offers returns via monthly or quarterly income.

Yieldstreet

4.4

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Lending