United States requirements to qualify as the measure of wealth is defined by the Securities and Exchange Commission (SEC)
- a net worth of $1 million excluding a primary residence - or
- For the past 2 years: $200,000 annual income if single or $300,000 if married
- More details provided by the SEC
There is a limit of 99 accredited investors that can take part in a single LLC equity offering. AngelList Syndicates and similar fund structures are helping to address this 99-investor limit problem by pooling investments from accredited investors. This creates one fund that pools investor commitments. There is only one entry on your capitalization table. These syndicates typically come with a cost. This cost is through carried interest.
- Individuals with over $5 million in net assets and
- Trusts or companies with over $25 million in net assets.
Qualified purchasers do not face any limit to the number allowed in a deal.
U.S Trust identifies an average accredited, high net worth, investor to allocate 6% of their portfolio to alternative assets. While an average millennial allocates 13% to alternative investments.
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