An Accreditation Report is a web page hosted by AngelList that investors can use to confirm their accreditation status. Once created, it can be reused for any investment that requires proof of accredited status.
Accreditation Reports meet the SEC’s new 506(c) accreditation standard for investing in publicly fundraising companies. It also meets the lower standard for investing in privately fundraising companies (the biggest difference between the standard for public and private fundraising is the requirement to provide proof of your finances for public financings.)
Many lawyers also consider things startups have always done to require the new standard, e.g. announcing a financing at a demo day or closing a round after a major article leaks about their financing.
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 reasonable steps to verify that investors are accredited. Simply stating that you are accredited, as investors did prior to September 2013, is not considered enough.
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 as well. 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.
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.
No. We perform a "soft-pull" credit report, which will not affect your credit.
For individual investors:
• Type of investment entity (individual, trust, firm)
• A letter from our attorney, or your designated third party advisor, stating that you have presented documents that indicate either income or assets above the required SEC accreditation threshold
• The date and total debts (excluding mortgages) from your credit report
• The date you last confirmed you were still accredited
For institutions, we will provide links to the evidence of accredited status (government filings or other sources).
Just click the "Get a private link to share your accreditation status" link shown on any verified investment entity (individual, trust, company, etc.) you have created on your Investor Status. We will ask you to confirm that you are still accredited. Once confirmed, we generate the Accreditation Report link for your investment entity.
You may provide this link to as many potential investments as you need to.
No. It's hidden from all search engines, but it is a link anybody can view if they have it. Share it with others at your own discretion.
You must swear you are still accredited each time you generate a link to share the report.
However, the proof only needs to be updated periodically. How often depends on what the investment entity is (individual, firm, trust) and what you use to prove your status: income or assets.
• Income proof can be used until April 15th of the year following its verification
• Asset proof can be used for 3 months
• All other cases, such as proof of a trust's accreditation through the accreditation of its entire individual membership, are currently limited to 3 months
These durations drive the green-colored "valid until" date you will see on every Accreditation Report. Once expired, updated proof will have to be presented to set a new validity date, but the Accreditation Report will remain publicly viewable.
We have worked very hard to match the evidence we collect to the standards contained in the SEC's regulations, but we do not make any guarantees.
Lawyers will make their own determination based on the company and as not all circumstances are identical. So far, companies represented by Cooley, Wilson Sonsini Goodrich & Rosati, Gunderson Dettmer, and many other firms have accepted investments based on this evidence. Thousands of investors have invested using the AngelList accreditation report.