US Accreditation for Investments (US deals only)
When investing in a US company through Odin, you will be asked to confirm whether you meet the US definition of an Accredited Investor. This guide explains what that means, why we ask, and how it affects your investment.
What you need to do
When you invest in a US deal for the first time, you’ll be asked to complete the US investor categorisation form. In this form, you’ll need to select the option that best describes your status under US securities law — confirming whether you qualify as an Accredited Investor, a Sophisticated Investor, or neither.
In short, per SEC (US Securities and Exchange Commission) guidelines, an Accredited Investor is an investor who meets one of the following definitions:
- Individual income exceeding $200,000 (or $300,000 jointly with a spouse or partner) in each of the last two years, with a reasonable expectation of the same for the current year.
- Net worth exceeding $1 million, individually or jointly with a spouse or partner, excluding the value of a primary residence.
- Holds certain professional financial licenses, such as the Series 7, Series 65, or Series 82.
- A director, executive officer, or general partner of the issuer of the securities being offered or sold.
- An entity (e.g., corporation, trust, or partnership) with assets exceeding $5 million, not formed specifically to purchase the offered securities.
- An entity in which all equity owners are accredited investors.
You need to select which definition applies to you and sign.
What is the SEC definition of a Sophisticated Investor?
In the US, the Securities and Exchange Commission (SEC) defines a Sophisticated Investor as someone who has sufficient knowledge and experience in financial and business matters to evaluate the risks and merits of an investment, but who does not necessarily meet the income or net worth thresholds required to be accredited.
Importantly, the term Sophisticated Investor is not an official substitute for being Accredited in most private offerings under US law. Only Accredited Investors are automatically eligible to invest in certain types of private securities.
That means:
- If you do meet the Accredited Investor criteria, you should select “Accredited” rather than “Sophisticated.”
- Selecting “Sophisticated” may prevent you from investing in some US deals, as many US companies only accept Accredited Investors.
What happens if you’re not US-accredited
If all investors in a deal confirm they are accredited, we can sign and close the deal without any extra paperwork.
If you don’t meet the US accreditation criteria, that doesn’t necessarily mean you can’t invest.
It simply means that:
- We may need to sign a side letter to allow your investment to proceed.
- In some cases, the investee company may not accept the side letter. In that case, if you confirmed that you are not US-accredited, then you will not be able to invest in the deal, and we’ll need to refund your investment amount.
Why we ask about US accreditation
Some US investment documents include a clause stating that all investors must be Accredited Investors under US securities law. If we can’t confirm this for every investor in a deal, we may need to sign a side letter with the investee company, or, in some cases, we may be unable to proceed with the investment.
By collecting this information early, we can determine whether all investors meet US accreditation standards before closing. This helps us complete US deals more smoothly and reduces the risk of delays.
Does this apply even if I’m not based in the US?
Yes. Your place of residence or tax residence doesn’t affect this requirement.
If the legal documents for a US deal state that all investors must be accredited, we must comply with that clause regardless of where you live.
Do all US deals require accreditation?
No, this depends entirely on the legal documents for each investment. However, many US investment agreements (especially SAFEs) do include this requirement.
Because we only review the final legal documents at closing, and the documents can vary vs. drafts, as a general rule, we collect accreditation information for all US deals on Odin. This helps us act quickly when it’s needed.
If you have any questions about US accreditation or how to complete the form, please contact us at hello@joinodin.com.