Accredited Investor

Individual Income Standard

An individual qualifies as an accredited investor based on income if they have had individual income exceeding $200,000 in each of the two most recent calendar years, or joint income with a spouse or spousal equivalent exceeding $300,000 in each of those years, and has a reasonable expectation of reaching the same income level in the current year.

Net Worth Standard

An individual qualifies as an accredited investor based on net worth if they have an individual or joint net worth with a spouse or spousal equivalent that exceeds $1,000,000, excluding the value of the primary residence. Mortgage debt on the primary residence generally reduces net worth only to the extent it exceeds the estimated fair market value of the residence.

Professional Certifications Standard

• Holders of the Series 7, Series 65, or Series 82 licenses in good standing qualify as accredited investors regardless of income or net worth.

• "Knowledgeable employees" of private funds — including executive officers, directors, trustees, general partners, and employees who participate in the investment activities of the fund — may qualify for investments in the fund in which they are employed.

Entity Standards

• Any entity in which all equity owners are accredited investors.

• Registered investment advisers and exempt reporting advisers.

• Investment companies registered under the Investment Company Act.

• Business development companies (BDCs).

• Rural business investment companies (RBICs).

• Entities with total assets exceeding $5 million that were not formed for the specific purpose of investing in the offered securities, including trusts, limited liability companies, partnerships, and corporations.

• Family offices with at least $5 million in assets under management and their family clients.

Verification Process

SMG QROF will take reasonable steps to verify accredited status as required by Rule 506(c), which may include review of tax and financial documents, third-party confirmation, or, where the minimum investment is at least $200,000 (natural persons) or $1,000,000 (entities), written representations consistent with SEC staff guidance.

Why Accredited Investor Status Matters

Qualified Opportunity Zone fund investments are private placements exempt from SEC registration. These exemptions are conditioned on investment by accredited investors. This requirement is intended to ensure that investors have the financial sophistication and resources to evaluate the risks involved and can afford the complete loss of their investment without materially impairing their financial condition.

Not Tax or Legal Advice

The information on this page is provided for general informational purposes only and does not constitute legal or financial advice. The determination of whether you qualify as an accredited investor is a legal question specific to your individual circumstances. SMG QROF strongly encourages you to consult qualified legal counsel before making any investment.