Accreditation overview

What is an accredited investor and is this required to invest on the CrowdStreet Marketplace?

Offerings on the CrowdStreet Marketplace must comply with SEC regulations that restrict investing to accredited investors only. When creating your Investing Account, you will be required to provide proof of accreditation.

Accredited investors, as defined by the SEC, are those who meet the following criteria:

Individuals

– with a pre-tax income exceeding $200,000 annually for the past two years, with reasonable expectation of maintaining or exceeding that total income the following year; OR

– with a net worth of more than $1 million, excluding the value of the primary residence; OR

– holding a Series 7, Series 82, or Series 65 that is active and in good standing

Joint Individuals

– with a combined pre-tax  income exceeding $300,000 annually for the past two years, with reasonable expectation of maintaining or exceeding that total income the following year; OR

– with a combined net worth of more than $1 million, excluding the value of the primary residence

Trusts

– with more than $5,000,000 in total assets, and not formed for the specific purpose of acquiring the subject securities; OR

– in which all grantors or settlers are accredited individuals (only applies to revocable trusts)

Entities

-with more than $5,000,000 in total assets, and not formed for the specific purpose of acquiring the subject securities; OR

-in which all equity owners, regardless of ownership percentage, are accredited individuals

How do I prove my accreditation status?

Within the ‘accreditation verification’ tab of your Investing Account, you will be provided the following options

• • • CrowdStreet Investor Relations can review your accreditation status directly.
      • Upload financials and documentation to show proof of your accredited status based on the requirements summarized above.
  • • You can provide a letter from your own licensed CPA, licensed attorney, or registered wealth advisor attesting to your status as an accredited investor. The uploaded letter must:
      • Be signed and dated by a qualified third-party; AND
      • Explicitly state the providers qualifications (ex, “I am a registered CPA in the State of [  ], license #”); AND
      • explicitly state that the investor/entity is an accredited investor (as defined by Rule 501a).

If a template is helpful, please find one here:
Investor Verification Letter Template.

Please note that third-party letters are only valid for 90 days from date of issuance.

Per SEC Rule 230.506(c)(2)(C), before accepting an investor into an offering, sponsors must obtain written proof of an investor’s accreditation status from a qualified third-party. If a third-party letter is provided, this will be passed to the sponsor directly and must be dated within the past 90 days.

As a qualified party, CrowdStreet can maintain your financial documents for one year and use those to continuously confirm your accredited status every 90 days to sponsors. After a year, we will need updated financial documents for review.

What documents can I provide to show proof of my accreditation status? 

Please see a list of documents needed to prove accreditation status.

Why am I required to be an accredited investor to invest with CrowdStreet?

Regulations requiring that investors be accredited are intended to protect the investors. Offerings published on the CrowdStreet Marketplace are exposed to a number of risk factors, including illiquidity and the potential for a full loss of capital, and are not registered and monitored by the SEC. Therefore, they are only available to those investors who have the baseline knowledge of such investments, their associated risks, and can bear the burden of full loss of capital.

Do I need to maintain my accreditation status?

You will only need to show proof of your status as an accredited investor when making an investment. Once an investment is made, you do not need to maintain proof of your status and an expired accreditation status within your Investing Accounts will not have an impact on the investment. When you are ready to make your next investment, you will need to ensure your proof of status is up to date.

Are my financial documents secure? 

We use industry standard encryption on all browser connections, ensuring information provided to CrowdStreet is encrypted while being transported on the internet. Furthermore, our file store is fully encrypted, so all files are encrypted on the disk. We use a fine grain permission system to ensure only certain team members will be able to retrieve and decrypt these documents for viewing.

Furthermore, if you use a modern browser like Chrome, Firefox, Edge, or Safari, it will warn you if a website doesn’t implement encryption on internet connections and try to prevent you from using these sites. You can always check yourself for the lock icon in the address bar (specific to your chosen browser)

What is a Qualified Client and a Qualified Purchaser? 

All investments on the CrowdStreet Marketplace require the investor to be an accredited investor. However, there are other tiers of investor designations that impact different exemptions outlined by the SEC.

Therefore, while every investor who invests through the CrowdStreet Marketplace will need to qualify as an accredited investor, some deals may require other additional investor qualifications. Two examples are Qualified Client and Qualified Purchaser.

What is a Qualified Client?

The definition of “Qualified Client” is found in the Investment Advisers Act of 1940 (specifically 17 C.F.R. § 275.205-3). In order to be considered a qualified client, you must meet one of the following criteria:

• • • You are an individual or company with $1 million in assets under management with the advisor immediately after entering into an investment advisory contract with the advisor;
    • You are an individual who has a net worth of more than $2.1 million, either by themselves or jointly with their spouse, immediately before entering into an advisory contract (excluding primary residence);
    • You meet the definition of a “qualified purchaser” (definition below);
  • • You are an executive officer, director, trustee, general partner, or person serving in a similar capacity of the advisor; or
    • You are an employee of the advisor who participates in the investment activities of the advisor (or similar company), and have done so for at least 12 months.

What is a Qualified Purchaser?

The definition of “Qualified Purchaser” is found in the Investment Company Act of 1940 (specifically, 15 U.S.C. § 80a-2(a)(51)).  In order to be considered a qualified purchaser, you must meet one of the following criteria:

• • You are an individual who owns $5,000,000 or more in investments (as defined by the SEC) (excluding a primary residence or business property). Investments can include stocks, bonds, futures contracts, real estate, etc.
  • You are a family-company that owns $5,000,000 or more in investments (as defined by the SEC) not formed for the specific purpose of acquiring the securities offered.
  • You are an entity which is owned entirely by qualified purchasers.
  • You are a trust that (a) was not formed for the specific purpose of acquiring the securities offered, and (b) as to which the trustee and each settler who contributed assets to the trust is a qualified purchaser.
  • You are a person or a company, acting for your own account or on the account of other qualified purchasers, who in the aggregate owns and invests on a discretionary basis at least $25,000,000 in investments, not formed for the specific purpose of acquiring the securities offered.
  • You are a qualified institutional buyer.