Individual investors can be verified base on a variety of methods. Some methods require more proof than others, and Accredd takes care to encrypt all documents uploaded to our platform. In fact, we use bank-level security to store files on our servers.
Note that these methods are defined by the SEC and the IRS, so we follow a strict process to stay compliant with regulations. Below are the common methods an individual can verify their accreditation status, in order of easiest to most time consuming for the individual.
Individuals need to share the previous two years of income by uploading documents proving their earned income was more than $200,000 annually ($300,000 annually if combined with a spousal equivalent). We review these documents to calculate the total income for each the previous two years.
Individuals can prove their net worth by sharing files that reveal their assets, as well as their liabilities. Examples of assets are bank statements, investment account balances, and/or ownership documents for vehicles or investment properties. The fastest way to prove liabilities is to retrieve a free credit report.
We review the assets and subtract any liabilities from them to calculate the individual’s net worth. This net worth must exceed $1,000,000 and not include the investors’ primary residence.
SEC and IRS guidelines enable us to verify an individual as an accredited investor if the investor holds certain FINRA licenses or if the individual is a knowledgable employee of the 506(c) issuer. We validate license numbers, as well as employment respectively.
We can review CPA letters that investors have, no older than 90 days. We perform a double layer verification by validating the license for the CPA (or attorney).