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#1
10-06-2006, 05:31 PM
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Accredited investors
The criteria are usually stated as:
1) earn an individual income of more than $200,000 per year, or a joint income of $300,000, in each of the last two years and expect to reasonably maintain the same level of income. 2) have a net worth exceeding $1 million, either individually or jointly with his or her spouse. 3) be a general partner, executive officer, director or a related combination thereof for the issuer of a security being offered. but who decides if these things are true, in particular criterion 2? Certainly "net worth" is not a totally objective number. Is there an accreditation process? eastbay 
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#2
10-06-2006, 05:52 PM
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Post deleted by Mat Sklansky
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#3
10-06-2006, 06:07 PM
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Re: Accredited investors
[ QUOTE ]
Which hedge fund do you want to invest in? [/ QUOTE ] I have no idea. I'm just trying to figure out if it's an option. My second question is: if you are married, can you have an "individual income"? Say I make >$200k but <$300k and am married, and my spouse has no appreciable income. Do I qualify, or is my income "joint"? eastbay
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#4
10-06-2006, 06:13 PM
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Post deleted by Mat Sklansky
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#5
10-07-2006, 02:08 PM
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Re: Accredited investors
[ QUOTE ]
http://en.wikipedia.org/wiki/Accredited_investor Some links and stuff there. I'm also very interested in how you go about proving this to the SEC, is there an application or something? (eastbay, maybe email a hedge fund and say you want in, i'm sure they'll tell you how its done...) [/ QUOTE ] there is no application. its a "representation" - you are just averring that it is so.
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#6
10-07-2006, 10:25 PM
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Post deleted by Mat Sklansky
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#7
10-06-2006, 06:24 PM
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Re: Accredited investors
You would be given an Investor Suitability Questionnaire, there are 12 criteria I think that would qualify you as being accredited. You check off the boxes that apply to you and sign it. The hedge fund has no responsibility to determine if you actually meet the criteria, and I've never heard of any gov't agency actually looking into whether people actually meet the criteria. Net worth includes your house so anyone that owns a house in an urban area can say they meet #2 without stretching things too much.
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#8
10-07-2006, 12:26 AM
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Re: Accredited investors
[ QUOTE ]
You would be given an Investor Suitability Questionnaire, there are 12 criteria I think that would qualify you as being accredited. You check off the boxes that apply to you and sign it. The hedge fund has no responsibility to determine if you actually meet the criteria, and I've never heard of any gov't agency actually looking into whether people actually meet the criteria. Net worth includes your house so anyone that owns a house in an urban area can say they meet #2 without stretching things too much. [/ QUOTE ] This is right. I've raised money from accredited investors before. If you are a "friend" of management, they can waive the requirement that you be an accredited investor. The only reason for requiring accredited investors is to minimize managements own legal liability. I waived requirements for some of my friends, unfortunately in my case, as this particular investment did not work out well.
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#9
10-07-2006, 02:06 PM
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Re: Accredited investors
[ QUOTE ]
The criteria are usually stated as: 1) earn an individual income of more than $200,000 per year, or a joint income of $300,000, in each of the last two years and expect to reasonably maintain the same level of income. 2) have a net worth exceeding $1 million, either individually or jointly with his or her spouse. 3) be a general partner, executive officer, director or a related combination thereof for the issuer of a security being offered. but who decides if these things are true, in particular criterion 2? Certainly "net worth" is not a totally objective number. Is there an accreditation process? eastbay [/ QUOTE ] None of this matters eastbay. no one will ever come after you. the accredited rule, while real, is really for the investor's protection. for example, if you a firm were to take your money knowing you were unaccredited and lost money for you, you could have a claim against them and they could have a regulatory problem. bottom line - it doesnt matter, sign away. lie if you really want in the fund. it's irrelevant...they just put these papers in a file. i haven't read or heard about someone having an issue with this a single time.
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#10
10-07-2006, 02:30 PM
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Re: Accredited investors
[ QUOTE ]
but who decides if these things are true, in particular criterion 2? Certainly "net worth" is not a totally objective number. Is there an accreditation process? [/ QUOTE ] The answer is, YOU decide... The real question is, do you know what you are doing and are you financially secure enough to be making this possibly risky investment... by signing off on the requirements, the firm is protected from you coming back later and saying, but I was a noob and had no clue I could lose my money doing this [img]/images/graemlins/wink.gif[/img] There are many hedge fund investors who do not technically meet the requirements... they are called, Smart! [img]/images/graemlins/smile.gif[/img]
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