🛠 Accredited Investor is a Lever, Not a Label

☕ Good morning!

Accredited investor status is one of the most misunderstood concepts in wealth building. On paper, it looks like a simple income or net worth test. 

In practice, it’s a strategic tool, used by investors who understand how to engineer access long before cash hits their account.

Most readers of this newsletter are either already there or within arm’s reach of being an accredited investor, but few are using that status to its full advantage.

And in 2025, the playbook favors those who plan ahead, whether through licensing, entity formation, or strategic timing around liquidity events.

Today, we’re going over accredited investor basics and what you need to know to use the accredited investor status to its fullest. 

What it means to be an accredited investor in 2025 

So, what actually makes someone accredited? 

The SEC says you qualify if you’ve earned at least $200K for the past two years (or $300K with a spouse), or if your net worth exceeds $1 million, excluding your primary home.

There isn’t an official badge, status, or SEC database, and you don’t get “approved” once and walk around with a government credential.

Verification happens deal by deal, and responsibility falls on the issuer (the fund, startup, syndicate, etc.) to verify. 

Some deals just ask you to check a box and sign a disclosure. That’s it. Others, especially those marketed publicly, require more paperwork. You might be asked to submit tax returns, brokerage statements, or get a letter from your CPA confirming your income or net worth. 

Some issuers outsource this to verification services that review your documents and issue a one-time accreditation letter. 

Income isn’t the only route to becoming accredited, anymore. 

Pass a Series 65, and you qualify. 

Work at a private fund in a senior role? Also counts. 

And if you’re investing through an entity with $5 million in assets, or one where every owner is accredited, you’re in.

So, what does accreditation actually unlock?

In plainspeak: access. 

Accredited investors get invited into deals that are off-limits to the general public, like private equity, hedge funds, venture rounds, real estate syndicates, secondaries, pre-IPOs. 

These aren’t just higher-risk; they’re often higher-upside and intentionally exclusive.

Being accredited generally signals two things: I know what I’m doing, and I can afford the risk.

If it goes south, there’s no safety net, just you, your signature, and your capital. That’s the tradeoff for getting in early.

You get early access. While the public invests at the IPO or token launch, accredited capital is raised during friends-and-family rounds, SAFEs, or private placements, when the terms are more favorable and the dilution is lower.

Then there’s velocity. Many private offerings operate under Regulation D, meaning they can raise money faster without registering with the SEC, but only from accredited investors. If you qualify, you’re in the flow. If not, you’re watching from the sidelines.

And finally, it serves as a signaling mechanism. Once you’re accredited, you’re on the radar for deal flow, angel syndicates, and invite-only platforms that never advertise publicly.

Being accredited doesn’t make you rich. However, it allows you to invest as if you already are.

For example, some of the biggest private companies, Stripe, Databricks, Anduril, OpenSea, and SpaceX, raised billions through early-stage and late-stage rounds that were only open to accredited investors. 

Some of the most valuable companies in the world, Stripe, Databricks, Anduril, and OpenAI, have raised billions through private rounds available only to accredited investors. 

Stripe, still private in 2025, achieved a $91.5 billion valuation through tender offers and secondaries open only to employees and high-net-worth investors. Databricks raised $10 billion in late 2024 at a $62 billion valuation, with no public access and no Robinhood link. 

Anduril, a defense tech firm, reached a $3 billion valuation in early 2025 via a $2.5 billion private round. 

And OpenAI raised $6.6 billion at a $157 billion valuation in 2024, entirely off-market. These deals weren’t just exclusive, they were invisible to anyone outside the accredited circle.

Now, not to say being accredited is instant access to the next OpenAI. Plenty of deals go sideways: startups flame out, funds underperform, and liquidity can stay locked up for years. 

But what accreditation does offer is a seat at the table. It gives you the option to evaluate early-stage or alternative opportunities on your terms, instead of waiting for them to be packaged for the public, often with most of the upside already priced in.

🎥 What Most People Get Wrong About Accredited Investor Status

Most people think it’s about hitting an income threshold and checking a box. It’s not. In this short video, I walk through how accreditation actually works in 2025, what it opens up, and how to qualify even if you’re equity-rich but cash-light.

The Next Level: Qualified Purchaser

There’s one tier above accredited investor that’s worth knowing: qualified purchaser. It’s a simpler threshold, just a bigger one: individuals with $5 million or more in investable assets (not including your primary residence or business property) qualify.

Why does it matter? Because some of the most selective private funds, particularly 3(c)(7) hedge funds, private equity, and credit vehicles, are restricted to qualified purchasers only. 

These funds often operate with fewer regulatory constraints and tighter capital pools, making them less accessible but more targeted.

Think of accredited status as the lobby. Qualified purchaser is the elevator key to the upper floors.

Making Sense of Accreditation As a Lever

For high earners, accreditation isn’t really a badge or bragging right… people aren’t necessarily bragging about being accredited at cocktail parties.

What it is is a tool in a diversified strategy only available to a certain type of people, and chances are you’re one of them. 

It’s about expanding your investment universe, so you’re not limited to whatever happens to be publicly available that quarter.

Used wisely, accreditation opens up access to asset classes that complement public equities: venture capital, private credit, real estate syndications, secondaries.

You can time your liquidity events, design entities around tax and qualification benefits, and position yourself in deals that don’t show up on brokerage dashboards.

Stay savvy, stay proactive, and keep your financial future bright.

Until next week!

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

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