Private offerings escape the disclosure machinery that governs public markets. The law’s bargain is that they may be sold, broadly speaking, only to investors presumed able to bear the risk and fend for themselves — accredited investors. The categories are concrete: income above defined thresholds in recent years, net worth above a defined level excluding the primary residence, certain professional licenses, and various institutional forms. The thresholds are set by regulation and worth checking directly, because they’re periodically revisited.
Self-certification vs. verification
How rigorously status is checked depends on how the offering is sold. In traditional private placements, investors typically self-certify by questionnaire. Offerings that are publicly advertised must go further: the seller has to take reasonable steps to verify accreditation — reviewing income or asset documentation, or relying on a written confirmation from a licensed professional such as a CPA, attorney, or registered adviser. If a platform asks for more than a checkbox, that’s the legal design working, not bureaucracy for its own sake.
What verification looks like in practice
Expect one of three paths: document review (tax forms for the income test, statements and a credit check for the net-worth test), a third-party letter from your CPA, attorney, or adviser confirming status, or a specialized verification service that does the review and issues a certificate. Letters are usually the least invasive path for people who’d rather not upload tax returns. Status confirmations are point-in-time; expect to refresh them periodically.
The part worth internalizing
Accreditation is a wealth screen, not a wisdom screen. Qualifying means the law permits you to take these risks — not that any particular offering deserves your money. The diligence habits in Trust Is Not Due Diligence apply to accredited investors most of all, because they’re the ones the disclosure rules stopped protecting. How our checks work lives on For Investors.
Educational only. InvestNow is a demonstration platform. This page is general information, not investment, legal, or tax advice, and not an offer or solicitation of any security. Private-market investments are speculative, illiquid, and can lose their entire value. Consult a qualified professional about your circumstances.