Accredited investors meet standards defined by the US Securities and Exchange Commission which allow them to invest in certain private securities offerings. Most startups raising money do so from accredited investors only.
The SEC web site contains the full definition. In general, any of the following would meet the standard:
• Individuals with annual income over $200K (individually) or $300K (with spouse) over the last 2 years and an expectation of the same this year
• Individuals with net assets over $1 million, excluding the primary residence (unless more is owed on the mortgage than the residence is worth)
• An institution with over $5 million in assets, such as a venture fund or a trust
• An entity made up entirely of accredited investors
As of September 2013, the SEC requires companies that publicly discuss their financing to take steps to verify that investors are accredited. This involves providing documentation that shows you meet one of the accredited investor thresholds.
Yes. The regulations governing general solicitation require evidence from all investors, not just US investors.
If you claim that you are an accredited investor because you have over $1 million in net assets, then the company you are investing in is required to verify your debts in order to confirm that your net assets are greater than $1M. AngelList requests this credit report and includes only total debts (excluding mortgages) in your Accreditation Report.
If you are accredited based on income, you will need to provide documentation of income for the past 2 years. This can be in the form of tax returns, W2s or other official documents. This is usually the fastest way to get accredited.
If you are accredited based on assets, you can provide recent brokerage statements clearly showing your name, the date and the value of your account(s). We will also pull your credit report and deduct any non-mortgage debts shown from the value of your assets to arrive at net assets.
You can also provide a recent letter from a reviewer like a CPA, attorney, investment advisor or investment broker. Our accreditation verification process will allow you to trigger an email to your reviewer using acceptable language.
Documents you upload as evidence of accreditation are kept private and are only used to assess your accreditation status. Licensed attorneys and CPA's review these documents to ensure that the relevant accredited investor thresholds are met.
No. We perform a "soft-pull" credit report, which will not affect your credit.
In summary, the application will see: the name of your associated investment entities, the type of proof of accreditation, the date it was last verified and the date that verification will expire, and the amount deposited into your AngelList investor account. The developers of the application may be copied on email correspondence regarding your account.