To invest on AngelList, you must be classified as an accredited investor under U.S. securities laws, regardless of whether you are a domestic or international investor. This designation is defined by the U.S. Securities and Exchange Commission (SEC) and is intended to ensure that individuals participating in high-risk investments have the financial capacity to absorb potential losses. Non-accredited investors cannot invest through AngelList due to regulatory constraints. An accredited investor typically meets one of the following criteria:
- Income Requirement: You have earned at least $200,000 individually, or $300,000 jointly with a spouse, in each of the last two years, and you have a reasonable expectation of reaching the same income level in the current year.
- Net Worth Requirement: You have a net worth exceeding $1 million, either individually or jointly with a spouse, excluding the value of your primary residence.
AngelList strictly adheres to these regulations to comply with the SEC. Before you can invest, you will need to verify your accredited investor status. This may involve providing financial documents like tax returns, W-2 forms, or statements from financial institutions, or proof of professional certifications. The verification process ensures that all investors meet the necessary criteria to participate in the high-risk environment of startup investing.
For the most current information, please visit the SEC’s website on Accredited Investors.