If you plan to invest in a securities offering that requires you to qualify as an accredited investor, you will need to provide certain documents to verify your status. The type of documentation required is based on the method by which you are seeking qualification. You can obtain accredited investor status through the following ways:
• Assets: This requires a net worth of more than $1 million USD, whether individually or jointly with a spouse or spousal equivalent, excluding the value of your primary residence.
• Income: This requires a yearly income of more than $200,000 USD (or $300,000 USD with a spouse or spousal equivalent) earned in each of the past two years, with the expectation of making the same income or greater during the current year.
• Licensed Professional Verification: This requires the submission of a letter from a licensed third-party that can verify your accredited investor status, such as a certified public accountant (CPA), attorney, investment broker, or investment advisor.
Documentation to Prove Net Worth Qualification
If you are seeking accreditation based on net worth, you may need to provide one or more of the following documents to prove your qualification:
• Consumer credit report listing all outstanding liabilities
• Bank statements
• IRS forms
• Brokerage statements
• Certificates of deposit
• Appraisal reports
• Tax assessments
• Deeds or other evidence of ownership for real estate holdings
• Value of private company securities holdings
• Third-party valuation of property holdings
• Proof of vehicle ownership
These documents should include your name, date, and monetary value of the account. Verification through the net worth test may involve a soft-pull of your credit report in which the evaluator will subtract any non-mortgage debts from the value of your assets in order to calculate net worth.
Documentation to Prove Income Qualification
If you are seeking accredited investor status based on the income test, you will need income-verifying documents such as pay stubs, Form 1040, Form 1099, Form W-2, Schedule K-1, a letter from a lawyer or accountant confirming actual or expected yearly income, or other official documents that indicate you fulfill the income requirement for the previous two years.
Documentation to Prove Series 7, Series 65, or Series 82 Licenses in Good Standing
If you are seeking accredited investor status based on having Series 7, 65, or 82 licenses, you must provide proof you carry this license in good standing. For Series 65, the investor may qualify as long as they are registered with a State to be in good standing. For this verification method, you simply need to enter your name as it appears on your license, your individual CRD#, and for Series 7 and 82 only, the name of the firm you are licensed through. Please see this link for additional guidance.
Regardless of the method by which you seek verification of the status of an accredited investor, it is important to supply all of the documentation required to make the evaluation process as easy and straightforward as possible.
