A trust may be accredited if it has assets in excess of $5 million and its purchases are made by a sophisticated person. While entities such as an LLC, corporation, or LP may be accredited if it simply has assets in excess of $5 million.
For the purposes of verification, a trust or entity cannot be formed for the specific purpose of acquiring the securities being offered. Typically, one would show the minimum assets by providing a bank statement or perhaps an appraisal of real estate held by the trust or entity.
If the trust or entity does not meet the minimum assets test, it might also be able to qualify as an accredited investor if all of its equity owners are accredited investors. This method of verification may be a bit complex, so if it applies to you, please feel free to contact us at support@verifyinvestor.com, and we will provide you with additional guidance.
When contacting the support team, please provide details such as the type of entity you are seeking to verify, the number of owners the entity has, if any of the owners are married, and in the case of a trust, whether it is revocable or irrevocable
Typically, when a company raises capital, it has to register its securities (basically the shares/interests that they are offering for sale). Registration is expensive and takes a long time. Most companies look for an exemption from registration. The most common exemption used by companies for this purpose is the private placement exemption, which basically meant the companies couldn’t publicly solicit or advertise. That makes it difficult to raise money.
The “Jumpstart Our Business Startups Act”, or the “JOBS Act” changed that. The JOBS Act allows companies to publicly solicit for funds and advertise while still conducting a private offering. However, it comes with a major catch. The only investors allowed to invest must be “accredited investors”, and the company raising money has to verify that their investors are truly accredited investors. A simple questionnaire is not sufficient – instead, companies must take further “reasonable steps” to prove their investors are accredited investors. Failure to comply is a violation of federal laws and may subject the company to enforcement action and the obligation to return money raised. That’s obviously bad for companies, but it’s also bad for investors who don’t know if the companies they invested in will suddenly have to return a portion of its capital to other disgruntled investors.
VerifyInvestor.com adopts best practices for verification because the penalties of noncompliance are so severe. Part of the verification process includes a review by a licensed attorney. We expect that most verifications will take one or two business days to complete, assuming, of course, that we are provided with all the necessary information to perform the verification review.
The documentation that is required depends on the type of accredited investor. After you’ve indicated to us what type of accredited investor you are, we’ll prompt you to upload certain documentation. For example, if you qualify by an income test, you may be prompted to upload a W2, K1, or 1099. Other types of accredited investors may have to upload an officer’s certificate or detail out their assets, and in the case of an individual qualifying under a net worth test, their liabilities as well. The reviewer of your file may ask you to upload additional evidence as appropriate. We recognize that this information may be highly sensitive and confidential. See our Security & Confidentiality section to understand how we protect your data.
You may use the accreditation letter for as many other investments as you need to during the life of the certificate, the only exception being verification letters that are restricted to a specific investment offering. Note the SEC requires that no evidence used for verification purposes be any older than 90-days, except for income evidence, these accreditation letters generally expire after 90-days.
Yes, but you may consider having different accounts anyway for different investor profiles if you prefer to keep your affairs between various entities/businesses separate.
Here at VerifyInvestor.com, we consider the privacy of your confidential information one of our highest priorities. Our security measures include 128/256-bit data encryption, database encryption, DDOS protection, a system of firewalls, and regular vulnerability checks.
Encryption is a series of methods that privatizes your information that is stored in our databases and while it travels to and from our servers. 128/256-bit scrambles your data and ensures it is secure to the point where it's inaccessible to hackers without a specifically generated key.
VerifyInvestor.com's firewalls restrict access from external networks and even between connections internally. By default access is denied to everyone and is only ever allowed when needed by the company. Should access be allowed for maintenance, everything is carefully monitored.
We take three steps to protect our investor’s information. First, the site utilizes robust security protocols. Learn more about those here. Second, the site provides investors with the ability to hide the personally identifiable information on the documentation they upload. This helps ensure that even the reviewers will not see the certain highly sensitive information of the investor. Of course, if the reviewer needs to see what was redacted in order complete the verification, the reviewer may ask you to modify the redaction or explain what was redacted. Third, all reviews are conducted by a licensed attorney that is bound by ethical duties and professional responsibilities to keep the information confidential.
It can, but it's a hassle and it's risky. A company that fails to meet the minimum federal standard will not be legally compliant. If they are not legally compliant, it is a major threat to both the company and investor. See What is the "JOBS Act" and why does it matter? for more details. Use of VerifyInvestor.com automatically ensures legal compliance. Also, a company conducting its own review would have access to sensitive information about its investors. Investors might feel more comfortable if the company only knew that they were accredited investors without knowing their highly confidential financial information. Our site is designed with security in mind and will generally be safer than sending financials to a company. See Security & Confidentiality for additional details.
We are significantly better for many reasons. All of our verifications meet the minimum legal requirements prescribed by the Securities and Exchange Commission. For individual investors, we'll generally fall into two safe harbor guidelines that ensure use of our verification services meets minimum legal requirements. Many other third party reviewers might not conduct a legally compliant review. All of our verifications are performed by licensed attorneys that are experts in this specific area of law. Additionally, we have much better security and confidentiality than what most third parties, including attorneys and other licensed professionals, generally have. See Security & Confidentiality for more details. We’re also faster. In less time than it takes you to find a licensed professional (never mind formally engaging one with a written engagement letter), you'll be done with VerifyInvestor.com. Lastly, we're inexpensive.
We take your privacy seriously. We never sell your personally identifiable information to third parties. Our workflow is designed so that, at your option, even our reviewers do not know your personally identifiable information. Our full privacy policy can be found by accessing the following link: Privacy Policy
An “accredited investor” is a type of investor. Generally, sales of securities must be registered with the SEC unless an exemption is found. Some of the exemptions require sales to be made to Accredited Investors. Our application lists out the various categories of accredited investors. The Securities and Exchange Commission also has a helpful page on accredited investors here.
How can I be verified as an Accredited Investor as an Individual?
An individual may be verified as an Accredited Investor through any of the verification methods noted below:
1. 3rd Party Professional Letter Method-
You have a letter dated within the last 90 days from a third party licensed attorney, a CPA, an SEC-registered investment adviser, or a registered broker-dealer certifying that you are accredited. As the SEC requires specific wording for this letter, we have a template letter available for you online when you select this option.
2. Income Method-
The income test requires that you have income exceeding $200,000 USD in each of the two most recent years and a reasonable expectation of the same income level in the current year. Alternatively, you could try to qualify with your spouse or spousal equivalent, if you have one. If your joint income with a spouse or spousal equivalent exceeds $300,000 USD for those years with a reasonable expectation of the same income level in the current year, then both you and your spouse or spousal equivalent would qualify as accredited investors. Evidence of the income should be supported by official tax records such as US tax returns, W-2, K-1, 1099, or other government documents, if possible. If that type of official documentation is not available, you may be able to provide evidence through earnings statements, pay stubs, a letter from your employer certifying your income, or perhaps bank statements that show that you receive that income.
3. Net Worth Method-
For the net worth test, you (or you and a spouse or spousal equivalent) must show enough assets to evidence a net worth of at least $1,000,000 USD ignoring the value of your primary residence and after discounting all your other liabilities (including liabilities exceeding the value of your primary residence and liabilities incurred on your primary residence within the last 60 days). To guide you on the asset evidence you need to provide, please see the below asset evidence chart.
| Type of Asset | How To Prove | Notes |
|---|---|---|
| Real estate (Primary residence) | Not applicable. The positive value of a primary residence does not count toward net worth for accredited investor purposes. | Liabilities incurred in the last 60 days against a primary residence and liabilities exceeding the value of the primary residence detract from the net worth for accredited investor purposes. |
| Real estate (NOT primary residence) | Show deed or other evidence, such as assessor records, to prove ownership. To prove value, obtain appraisal or price opinion letter from real estate broker or valuation professional. Tax assessor valuations may be used, but often undervalue assets. | The value of real estate that is not a primary residence may be counted toward net worth for accredited investor purposes, but all liabilities on such real estate should be disclosed and will be deducted from net worth. Appraisals are the best evidence, but may be costly. Many real estate professionals will provide price opinions for free. Reasonably reliable computer generated valuation reports (such as Zillow's Zestimate) may be acceptable. |
| Bank accounts, certificates of deposit (CD's), brokerage, and other deposit or securities accounts | Show latest statement or get letter from the financial institution indicating value of account. Statement or letter should show the investor's name or investor should otherwise prove ownership of the account. | It is not necessary to show social security numbers, full account numbers, or individual positions. Identifcation of the account, account ownership, and value of the total assets should be sufficient in most cases. If an account contains a liability, disclose that liability so that net asset value can be determined. |
| Private Company Securities | The best evidence is to provide a formal valuation from a valuation professional or an accountant. If a formal valuation is not available, obtain a statement from the company as to reasonable fair market value. | If the valuation is provided by the company, the reviewer may want to confirm that the valuation was provided in an unbiased manner. The reviewer may choose not to accept a valuation if the reviewer has any reason to question the validity of the valuation. |
| Annuities, Insurance, and Similar Assets | These types of assets sometimes have a cash value. Provide the latest statement or a letter from the financial institution indicating the cash value. | |
| Vehicles (e.g. automobiles, yachts, etc.) | Privide a copy of the vehicle title that identifes the vehicle and owner. Provide a valuation from a valuation professional. In some cases, standardized pricing manuals, such as Kelley Blue Book prices for automobiles might be used. | |
| Personal Property | Provide evidence of ownership of the personal property as best as possible. Provide an objective third-party valuation of the personal property | Personal property is difficult to verify. Different valuations may be necessary for different assets. Reviewers may not accept personal property as evidence if they cannot confirm ownership or value. |
Investors also need to provide 3rd party liability evidence by submitting a copy of their credit report (no older than 90 days). You may obtain your credit report through any of the following options: 1) Order one free credit report from any of the credit reporting bureaus from https://www.annualcreditreport.com (on that site, we recommend requesting your report from either Equifax or TransUnion where you can download a PDF copy); 2) For a faster, simpler process, authorize VerifyInvestor.com to generate a credit report from TransUnion (for a $5 fee, payable when you select this option); 3) Order a credit report from Experian Connect℠.
Note that if you are verifying together with a spouse or spousal equivalent, both individuals must provide a credit report, if only one spouse or spousal equivalent is being verified, then the need for an additional credit report will be determined by your reviewing attorney.
4. License Holders Method-
A natural person holding General Securities Representative (Series 7), Private Securities Offerings Representative (Series 82), or Licensed Investment Adviser Representative (Series 65) registration in good standing. For Series 7 and Series 82, the reviewing attorney needs to ensure that the investor is currently working for a FINRA-member or SRO firm, or is within 2 years since they were either terminated or left a firm and has not yet found employment with a FINRA-member). For Series 65, the investor may qualify as long as they are registered with a State to be in good standing. For this verification method, you simply need to enter your name as it appears on your license, your individual CRD#, and for Series 7 and 82 only, the name of the firm you are licensed through. Please see this link for additional guidance.
5. Insider Method-
A director, executive officer, or general partner of the issuer of the securities being offered or sold, or a director, executive officer, or general partner of a general partner of that issuer. Note that this accreditation verification is limited to the issuer’s current offering only.
Evidence for this verification may be either an Incumbency Certificate or an Officer's Certificate no more than 90 days old).
6. Knowledgeable Employee Method-
A “Knowledgeable Employee” of a private fund, but only for investments in that fund. Knowledgeable Employee is: (i) an executive officer, director, trustee, general partner, advisory board member, or person serving in a similar capacity, of the private fund or an affiliated management person of the private fund; or (ii) an employee of the private fund or an affiliated management person of the private fund (other than an employee performing solely clerical, secretarial or administrative functions with regard to such company or its investments) who, in connection with his or her regular functions or duties, participates in the investment activities of such private fund, other private funds, or investment companies the investment activities of which are managed by such affiliated management person of the private fund, provided that such employee has been performing such functions and duties for or on behalf of the private fund or the affiliated management person of the private fund, or substantially similar functions or duties for or on behalf of another company for at least 12 months. Note that this accreditation verification is limited to the issuer’s current offering only. Evidence for this verification may be either an Incumbency Certificate or an Officer's Certificate no more than 90 days old)
7. Special Situation-
This is a seldom-used option as it is designed to be used by either publicly traded entities or by individuals who are extremely famous for being rich, to the extent that they do not need to go through the usual verification process, for example, Warren Buffet. If you believe you are in this category, please contact support@verifyinvestor.com and let us know so that we may provide additional guidance.
Please note that the verification reviews are conducted by independent, licensed attorneys that VerifyInvestor.com does not control or influence. Therefore, what constitutes sufficient evidence is subject to their professional judgment.
That's very helpful. It'll help you understand our workflow. Unfortunately, because of the new laws applicable to fundraising, your status as an accredited investor must now be verified for certain types of securities offerings. You can find out more about the new laws by clicking here: What is the "JOBS Act" and why does it matter?
Generate a statement from your cryptocurrency account or wallet ideally showing the account holder name and amount of holdings. Please also provide a link to a website that shows the value of the cryptocurrency in USD or provide a screenshot. The reviewer may ask for you to create a cryptographic proof of ownership by signing a message.
Unfortunately, you must go through our web application to complete the verification. The verifications are conducted by outside licensed attorneys, and the system must be used for your safety and protection. In addition, the system provides a complete audit trail.
If you have access to a scanner, you may scan that documentation into a PDF format. Alternatively, you can take a picture using your camera and save it into PNG or JPG format. It is not recommended to use the picture method if you have many pages to scan.
Unfortunately, under US federal laws, our reviewing attorneys will be unable to verify you as an accredited investor. In this case, you should cancel the verification request by logging into your account at VerifyInvestor.com, clicking the button to continue the verification, and then scrolling to the bottom whereby you click the link that to indicate that you are either not an accredited investor or have chosen to cancel the verification request. If someone else has requested verification of you, they are not informed that you are not an accredited investor, only that we were unable to verify that you were one. They receive the same message if an investor chooses to cancel the verification.
You may cancel the verification request by logging into your account at VerifyInvestor.com, clicking the button to continue the verification, and then scrolling to the bottom whereby you click the link that to indicate that you are either not an accredited investor or have chosen to cancel the verification request.
The Net Worth test requires that you have a net worth over $1 million, either alone or together with a spouse (excluding the value of your primary residence, but including liabilities exceeding the value of your primary residence and liabilities incurred on your primary residence within the last 60 days). To evidence your liabilities, you have to upload a consumer credit report. To evidence your assets, you would upload bank statements, brokerage statements and other statements of securities holdings, certificates of deposit, tax assessments and appraisal reports. All documentation must be no more than 90 days old. Note, that if you hold some assets through a company, then you would have to show the value of your ownership of that company instead (which may require you to show the value of the company or its assets).
The income test generally requires that you have income exceeding $200,000 USD in each of the two most recent years and a reasonable expectation of the same income level in the current year. Alternatively, you could try to qualify with the joint income of you and your spouse, if you have one. If your joint income with a spouse exceeds $300,000 USD for those years with a reasonable expectation of the same income level in the current year, then both you and your spouse would qualify as accredited investors. Evidence of the income should be supported by official tax records such as tax returns, W-2, K-1, 1099, or other government documents, if possible.
A trust may be accredited if it has assets in excess of $5 million and its purchases are made by a sophisticated person. While entities such as an LLC, corporation, or LP may be accredited if it simply has assets in excess of $5 million.
For the purposes of verification, a trust or entity cannot be formed for the specific purpose of acquiring the securities being offered. Typically, one would show the minimum assets by providing a bank statement or perhaps an appraisal of real estate held by the trust or entity.
If the trust or entity does not meet the minimum assets test, it might also be able to qualify as an accredited investor if all of its equity owners are accredited investors. This method of verification may be a bit complex, so if it applies to you, please feel free to contact us at support@verifyinvestor.com, and we will provide you with additional guidance.
When contacting the support team, please provide details such as the type of entity you are seeking to verify, the number of owners the entity has, if any of the owners are married, and in the case of a trust, whether it is revocable or irrevocable
Definitely! We built our system so that it could verify foreign investors and international accredited investors. We've processed verifications for foreigners all around the world. If you use our system and it seems to call for US specific documents, provide them if you have them, or use similar documents from your own country. If you have any questions, just contact us, and we'll be happy to help you.
Definitely! We built our system so that it could verify all types of accredited investors, and we’ve processed verifications for all types of accredited investors. While you might not see a FAQ item relating to your category, rest assured that our web application can handle all categories of accredited investors. Our system should be easy to navigate, but if you have any questions, just contact us, and we’ll be happy to help you.
It's easy. From our homepage, click on the button that says "Verify Your Investors" to create an account. If you already have an account, just sign into your account using the "Sign In" link at the top-right of the homepage. Give us the email addresses of the investors you want to verify, and we'll take care of the rest. You'll get email updates as each verification is processed, and you can also track the status of all your verification requests through your dashboard. For more information, visit: https://www.verifyinvestor.com/how-to-verify-an-investor. If you have any questions, please contact us.
It's easy. From our homepage, click on the button that says "Verify Yourself" to create an account. If you already have an account, just sign into your account using the "Sign In" link at the top-right of the homepage and click on the "Order Self-Verification" button. For more information, visit: https://www.verifyinvestor.com/how-to-order-self-investor-verification. If you have any questions, please contact us.