“Accredited investor” is a term defined by federal securities laws. Generally, an “accredited investors” is an individual who (a) has income that exceeded $200,000 (or $300,000 with a spouse) in each of the prior two years, and expects the same for the current year, OR (b) has a net worth over $1 million, either alone or with a spouse (excluding the value of the person’s primary residence). Accredited investors tend to be wealthy, sophisticated investors. Frequently some riskier investments are limited to accredited investors who are presumed to better understand the risks of investing and can afford to lose the money they invest.
The idea is to protect new, less experienced investors from getting hurt by risky ventures, but it can create an uneven playing field that Swell Compound is out to fix.
