Accredited Investor

An investor meeting income or net-worth thresholds, and therefore permitted to buy into private placements.

Definition

An investor who meets specific income or net worth requirements and is permitted to participate in certain private investment opportunities, including flow-through share financings. Requirements vary by jurisdiction but generally involve annual income over $200,000 or net worth over $1 million.

Why it matters

Placements are where juniors are funded, and they are largely closed to retail investors. Accreditation is the line that decides who gets to buy at the discount and who buys later in the open market.

In practice

Thresholds vary by jurisdiction but commonly involve income above $200,000 or net financial assets above $1 million. Other exemptions exist, including the Canadian listed-issuer financing exemption used by many recent raises.

See also

  • Private Placement A capital raising method where securities are sold directly to a small number of investors rather than through
  • Retail Investor A retail investor is an individual who buys and sells securities (such as stocks, bonds, mutual funds, or ETFs
  • Flow-Through Shares A Canadian tax incentive that allows mining exploration companies to transfer tax deductions for exploration e

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