An accredited investor, as defined by the SEC is an investor with:

A net worth of $1 million or more, excluding the value of their primary residence

OR

Someone who has maintained an annual minimum income of $200,000 for at least the last two years (or $300,000 combined with his or her spouse’s income) and anticipates the same for the current year.

An accredited investor is perceived to have more financial acumen. From a legal perspective, more investment opportunities are available for accredited investors compared to non-accredited investors. Prior to the new regulations from the JOBS Act of 2012, only accredited investors were allowed to invest in private securities, but the landscape has now drastically change