What is an Accredited Investor?
The SEC governs who can and cannot sell and purchase securities, and which investments must be registered with the SEC. These rules, while complicated, exist for a reason–they help prevent fraud and protect investors. The SEC has laid out a set of financial criteria designating certain investors as “accredited.”
These criteria establish certain thresholds of wealth, verifiable either through salary or personal holdings, and are intended to exclude those who may not possess enough experience and/or knowledge in investing to avoid taking on undue risk in private securities, which are less heavily regulated than public equities on the stock market. Accredited investors may participate in certain, widely offered private securities, provided that they can verify their accredited status via an SEC-approved method.
How Do I Know If I Am An Accredited Investor?
An accredited investor isn’t necessarily an individual person; trusts, certain retirement accounts, and LLCs may also qualify for accredited investor status. Therefore, you should first consider in which capacity you would like to invest. Each investing capacity may have slightly different criteria to be considered accredited, so we have several resources to simplify the process:
- Our interactive tool will help you determine whether you, as a natural person, or your entity, meet the SEC’s criteria for accredited status.
- This infographic flowchart outlines the accreditation standards for all entity types.
Once you know if you qualify as an accredited investor, the ability to verify your accreditation is what makes you eligible to invest in the commercial real estate offerings on the CrowdStreet Marketplace.
How Do I Verify My Accreditation?
At CrowdStreet, we make the accreditation verification process as easy as possible by offering several options. Choose whichever option works best for you!
Get a letter signed by your CPA, attorney, or wealth advisor
The SEC requires accreditation to be verified by a qualified, independent third party. Qualified parties under the SEC rules would include a CPA, attorney, or wealth advisor attached to a registered broker-dealer. If you who already work with one of these parties, ask them to complete and sign this one-page template letter, and then scan and upload this to your documents in the CrowdStreet portal.
Use our online, integrated workflow through VerifyInvestor.com
Alternatively, CrowdStreet investors may use our integrated third-party partner, VerifyInvestor.com. If you use the integration through the CrowdStreet platform to VerifyInvestor.com, CrowdStreet is able to absorb the cost of this service on your behalf. To use VerifyInvestor.com, follow the link in the Transaction Center, which becomes available after submitting closing documents for a given offer.
VerifyInvestor will ask you to securely upload documentation such as W-2s, tax returns, and/or account balance statements for review by their team of attorneys. Your accreditation verification letter will be automatically imported into your CrowdStreet account, and your supporting documents are retained, either by VerifyInvestor or CrowdStreet. The turnaround time is typically one to two days.
Please note that, per SEC rules, each accreditation verification letter is only valid for 90 days. Investors who make multiple investments will need to periodically renew their verification.
What Else Do I Need to Know About Accreditation?
Anyone can browse the offerings on the CrowdStreet Marketplace, accredited and non-accredited alike. Accreditation verification will be required as the third step to complete the investment process.
Our Frequently Asked Questions cover most of the other things investors have asked us on this topic, but if you have a question that hasn’t been covered here, please email our Investor Relations team at firstname.lastname@example.org.