accredited investor registration?

Question

Hello BP,

This is not a 1031 question but I thought the audience here may have better idea of what I need.

If one meets the requirements of an accredited investor, do they go register somewhere or how does it work?

Thanks!

Drew Reynolds · Answer

Hi @Wogderess H.,

I assume your question pertains to syndicated investments, like a DST (where investors need to be Accredited).  No, there is not a registration.  How it works depends on how the offering is issued (506(b) or 506(c)) , but basically the first step is self-attestation of accredited investor status.  Before you are allowed to see an offering structured as a 506(c), securities regulations require that an advisor determine your suitability for an investment, disclose investment risks and give you a chance to ask questions.  At this point, there is no documentation required - meaning you're basically on the honor system here as it pertains to accreditation.  When it comes time to actually invest, you will typically be required to show some sort of verification - either a signed financial statement if you meet the requirement on net worth, or income tax returns if you meet the requirement on income.

Kim Lisa Taylor · Answer

For Regulation D, Rule 506(b) Offerings, you can self-certify by answering a set of questions designed to see of you meet one of the SEC's 8 definitions of an Accredited Investor. For Regulation D, Rule 506(c) Offerings - self-certification is not usually sufficient as the Issuer of the Securities (sponsor or manager of the offering) has to be "reasonably assured" that you are Accredited. That is usually done by having your own CPA, Attorney, or Registered Investment Advisor (someone with a license) write a letter stating that they have reviewed your financial statements and/or income statements and that you are indeed Accredited. If you don't have such a person, you can go to a third party service like VerifyInvestor.com and pay a fee for them to review your financials and generate the letter (from an attorney). For Regulation D, Rule 506(c) offerings, however, the verification must done within the last 90 days.

Wogderess H. · Answer

great. thanks @Drew Reynolds.

Nick Stromwall · Answer

great answers above.

I'd add a few resources:

→ accredited investors qualifications: https://www.sec.gov/resources-small-businesses/capital-raisi...

→ many fund managers will help you self-certify (I'm happy to help)

I have more information on my website here:

https://www.oakandvinecapital.com/accredited

Becoming accredited unlocks more opportunities, and you can learn about new opportunities without having a relationship with a sponsor or fund manager (506c offerings)

If you are sophisticated, you can also take advantage of investing in alternative assets, you just need to have a pre-existing relationship with a sponsor or fund manager.

Happy to help more!

accredited investor registration?

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