Accredited status typically refers to a designation given to investors who meet certain financial criteria and are deemed to have sufficient financial sophistication to participate in certain types of investments that are considered higher risk or more complex, such as venture capital and startups.

In the United States, the concept of accredited investors is primarily defined by the Securities and Exchange Commission (SEC).

For a person to qualify as an accredited investor, the must meet at least one of the following criteria:

• Income Test: The individual has had an annual income of at least $200,000 (or $300,000 for a married couple) for the past two years, with a reasonable expectation of reaching the same income level in the current year
• Net Worth Test: The individual has a net worth of at least $1 million, either individually or jointly with a spouse (excluding the value of their primary residence)
• Professional Designations: Certain professional certifications, designations, or credentials may qualify an individual as an accredited investor

Investors that qualify for the accredited status have access to a wide variety of private market deals that are otherwise not accessible to a majority of the investor base. 

The assumption behind the accredited investor status is that a person with a substantial income level and net worth has the necessary financial qualifications and resources to be liable for such non-liquid investments. 

However, it must be noted that for private equity investments, accredited investors are often barred from investing more than 10% of their liquid annual income in a particular investment to avoid overexposure and putting their financial stability at risk. 

Obtaining an accredited status comes with a few key perks for investors that allow them to access deals and investments that are otherwise not available to retail investors. 

Some important implications of the accredited status include:

• Access to Private Placements: Accredited investors are often allowed to participate in private placements of securities, hedge funds, venture capital, and certain other investment opportunities that are not registered with the SEC
• Greater Autonomy: Accredited investors can personally manage their investments. Which includes private equity and other investments, such as farmland shares, real-estate funds, and more 
• Risk Considerations: Investments available to accredited investors may involve higher levels of risk, complexity, and illiquidity compared to publicly traded securities

• Accredited investors are individuals that comply with net worth and annual income requirements that allows them to access curated private market deals that are generally not accessible to retail investors
• To become an accredited investor, an individual must have at least $200,000 individually or $300,000 as a married couple in annual income, or a individual/joint net worth of at least $1 million 
• Investments curated for accredited investors may carry more risk and be less liquid than listed instruments