Question
We are a small team with a mostly technical background and have been bootstrapping our product for a while. We are preparing a larger financing round and I would like to make sure I understand some of the more important points before we know which kind of external counsel we require for that. I would be grateful for a good simple response on what an IT startup definitely needs to know and will follow up on the more detailed points.
Answers: 1 public & 0 private
In a sentence, an accredited investor is one that meets the requirements established by the U.S. Securities and Exchange Commission to engage in large-scale investment transactions, while a non-accredited investor does not meet said requirements.
Accredited investors are usually more sophisticated and have more financial know-how. They typically meet at least one of the following criteria:
(1) Earn an annual individual income of more than $200,000 or a joint annual income of $300,000 for the last two years and have the reasonable expectation of maintaining the same level of income for the current year.
(2) Have a net worth exceeding $1 million, either individually or jointly with his or her spouse.
(3) Serve as a general partner, executive officer, director, or similar role for the issuer of a security being offered.
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