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from http://startuplawyer.com/startup-law-glossary/accredited-investor http://startuplawyer.com/startup-law-glossary/accredited-inv... ... The federal securiti
by bradleyjoyce 16y ago
from http://startuplawyer.com/startup-law-glossary/accredited-investor http://startuplawyer.com/startup-law-glossary/accredited-inv... ...
The federal securities laws define an accredited investor in Rule 501 of Regulation D as:
5. a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, provided that the value of a person’s primary residence may not be used for such net worth calculation, but any indebtedness in excess of the value of the primary residence shall be used in the calculation;
6. a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year
- rms 16y agoYes, so the question then becomes, what is the definition of net worth?
- bradleyjoyce 16y agoAssets - Liabilities? Your business surely can be considered an asset. The difficulty is in the valuation as you've mentioned. Cash on hand. Multiples of revenues or profits. These are all options. Not sure what the SEC says on the matter. The easiest thing to do, if you need to be 100% certain, would be to get a bank loan based on the value of your business and have the cash on hand to prove you meet the requirement.
- rms 16y agoThanks! Bank loan is a good idea, also considering that we should really get one and have been procrastinating about actually do so.
- deleted 16y ago[deleted]