An accredited investor is an individual or entity that meets SEC-defined financial criteria, granting them access to private investments such as syndications, hedge funds, and private equity deals. The SEC established these requirements to ensure investors have the financial sophistication and capacity to handle higher-risk investments. To qualify, an individual must have a net worth of at least $1 million, excluding their primary residence, or an annual income of at least $200,000 ($300,000 for joint filers) for the past two years, with the expectation of maintaining that income level. Certain entities, including trusts and family offices, may also qualify if they meet specific asset thresholds. Accreditation provides access to exclusive investment opportunities not available to the general public, as these offerings are typically exempt from SEC registration and have fewer investor protections.
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