They're Certifiable!
Need
big bucks? Find accredited investors.
As you look for individuals who have money to infuse your
business with, you've probably seen or heard the term
"accredited investor" countless times. Don't dismiss
it as unimportant.
"An accredited investor is a legal term that identifies
someone [presumed to have a certain level of sophistication]. They
have the knowledge to [recognize] the risks inherent in a proposed
investment," says Susan Bird, founder of Women.future, a
company that uses Web and satellite technology to arrange
conversations between businesswomen.
According to the Securities Exchange Commission (SEC), an
accredited investor can be a person or business and must have a net
worth of at least $1 million or an income exceeding $200,000. (See
www.sec.gov/smbus/qasbsec.htm under Regulation D for a
full explanation.)
Content Continues Below
To avoid violating SEC laws when you're gathering a group of
investors, you can't get money from more than 35 non-accredited
investors. Consequently, finding these high-net-worth people
becomes critical because it can help you sidestep crippling
lawsuits should your venture prove unsuccessful.
Don't look for investors to hand you accreditation
certificates because they don't exist. Instead, depending on
where you live, you can accept an investor's written
declaration or verify it through written records.