Quick Answer
Three separate statuses, three separate rule books. Accredited investor gates who may buy into a private offering, qualified institutional buyer gates who may buy restricted paper in a private resale, and qualified purchaser gates who a private fund may accept. The dollar figures look alike, so attach each one to its own test.
The whole unit on one sheet: who qualifies, how status is verified, and where restricted paper goes.
Which One-Liners Win Points?
- Status entities carry no dollar test. A bank, savings and loan, registered broker-dealer, registered investment adviser, insurance company, registered fund or business development company, small or rural business investment company, and the issuer's own director, executive officer or general partner.
- Threshold entities are tested on size. Six categories generally clear $5 million; a trust and a family office also need a sophisticated person directing the purchase, and the catch-all row counts investments owned, not total assets.
- An Employee Retirement Income Security Act (ERISA) plan instead qualifies through a regulated fiduciary, plan assets over $5 million, or self-direction solely by accredited investors.
- Look-through beats a thin balance sheet. An entity whose every equity owner is accredited qualifies whatever it owns, and an entity whose every owner is a qualified institutional buyer (QIB) is a QIB.
- A natural person clears net worth or income, not both, and a professional license designated by the Securities and Exchange Commission, held in good standing, qualifies outright.
- Only a general-solicitation private placement must verify. A no-solicitation placement needs only reasonable belief.
- The QIB private resale safe harbor has no holding period. It turns on who buys, the securities stay restricted, and a QIB buying for its own account is deemed a qualified purchaser, never an accredited investor.
Which Numbers Matter Most?
| Test | Figure |
|---|---|
| Accredited person, net worth | Over $1 million, primary residence excluded |
| Accredited person, income | Over $200,000 single or $300,000 joint, two years, plus a current-year expectation |
| Accredited entity | Over $5 million |
| QIB institution | $100 million in unaffiliated securities |
| QIB registered dealer | $10 million |
| QIB bank | $100 million plus $25 million audited net worth |
| Qualified purchaser, person | $5 million in investments |
| Qualified purchaser, institution | $25 million in investments |
Which Gotchas Trip Students Up?
- The joint income figure is $300,000, not double $200,000, and two qualifying years without the current-year expectation still fails.
- New mortgage debt taken on in the 60 days before the sale is a liability, and so is any balance above the home's value.
- Four of the six accredited threshold rows fail if the entity was formed to buy into this offering, though the two benefit plan rows do not, and a catch-all QIB entity may be purpose-formed.
- A bare self-certification never satisfies the verification duty, actual knowledge overrides any completed method, and the papers must be dated within three months while a prior verification lasts five years.
- Bank QIB status needs both figures, on statements within 16 months, or 18 for a foreign institution.
- The qualified-purchaser fund exclusion answers only the fund's registration status, and a dealer needs $25 million, not $10 million, to be deemed a qualified purchaser.
One-Breath Recap
Investor qualification runs on three separate statuses. An accredited investor is a status entity with no dollar test, a threshold entity over $5 million, or a natural person over $1 million in net worth excluding the primary residence, over $200,000 individually or $300,000 jointly with a current-year expectation, or holding a designated license; only a general-solicitation offering forces verification steps. A qualified institutional buyer owns $100 million in unaffiliated securities, or $10 million as a dealer, and buys restricted paper in a resale with no holding period that leaves the securities restricted. A qualified purchaser owns $5 million, or $25 million as an institution, and lets a fund drop the investor-count cap.
Need more than the recap? Read the full Investor Qualification and Resales unit.