Understanding SEC Accreditation Qualifications

Note that investment in or through the Startup Haven Fund or the Startup Haven Syndicate is expressly limited to accredited investors only.

According to the SEC, there are financial and professional accreditation criteria that can apply to a natural person:

Financial Criteria

  • Net worth over $1 million, excluding primary residence (individually or with spouse or partner)
  • Income over $200,000 (individually) or $300,000 (with spouse or partner) in each of the prior two years, and reasonably expectation of the same for the current year

Professional Criteria

  • Investment professionals in good standing holding the general securities representative license (Series 7), the investment adviser representative license (Series 65), or the private securities offerings representative license (Series 82)
  • Directors, executive officers, or general partners (GP) of the company selling the securities (or of a GP of that company)
  • Any “family client” of a “family office” that qualifies as an accredited investor
  • For investments in a private fund, “knowledgeable employees” of the fund

What about Startup Founders?

Startup Haven has conferred with qualified legal counsel regarding the value of a startup founder’s ownership in their own startup company for the purpose of determining net worth. Based on the advice of counsel, Startup Haven believes that founders may consider the value of their ownership in their company as contributing to their net worth.

For example, if a founder owns 30% of the equity of their startup company and that company is fairly valued at $5,000,000, then the founder may consider that their net worth would include approximately $1,500,000. It is important that the valuation ascribed to the startup be reasonable, defensible and, where possible, validated by a third party. Examples of third-party validation could include a 409-A valuation conducted by a qualified firm or a bona fide monetary investment by a sophisticated investor at the ascribed valuation.