The Importance Of Accredited Investor Lists
It can take a lot of time to create an accredited investor's list. It takes a lot to get the right people interested in your firm.
Accredited investors are required to have a net worth of at least $1 million, excluding the value of their principal residence. These investment heavyweights can be a great asset to you.
Oil and Gas Industry
When raising capital for a company or project, a well-built list of accredited investors can save you time while increasing your sales volume. It is important to match psychographic and demographic qualifiers with your core customers. Age, net worth, home values, purchasing behavior and lifestyle interests, for example, are all important factors when determining the best qualified investors to invest in your security offerings.
Oil and gas companies face a number of challenges that can threaten their business model. Supply disruptions, volatility in prices and a shift to renewable energy are some of the issues that must be addressed.
The need for constant access to funding is therefore more important than ever. Bank financing is one option for many of these businesses. This method can be difficult for new oil and gas companies as they need a well-documented plan of business to qualify. This can be a lengthy process that can take months to complete. Project finance mechanisms are another option. They provide startups with the capital they require in a short period of time. These mechanisms are currently used by some of world's largest energy companies such as Exxon in the U.S., Chevron in the U.S., and Saudi Aramco in Saudi Arabia.
Real Estate
You can save time and increase sales by marketing to accredited investors if you are looking to raise capital in the real estate sector for your business or project. In the United States individuals can become accredited by meeting the SEC definition of having a total net worth of at least $1 million (excluding the primary residence) and earning more than $200,000 per year for the past two years, with the expectation of continuing this trend in the future. Accredited investors can also be financial professionals who hold Series 7, 65, and 82 licenses.
To prove their status, a person who claims to be an accredited investment may need to submit documentation such as tax filings or pay stubs. They may also have to provide bank statements and investment portfolios. Some securities issuers may also require that a person be re-verified once every 12 to 24 month to ensure they still meet the requirements for the securities offered.
Manually verifying the status of a large number potential accredited investors can be a burden for those offering investments. The more verifications, the greater the chance of human error that can be attributed to the securities issuer. There are many ways to streamline the process. By submitting documents such as W-2 forms and income tax returns or bank statements, private real estate crowdsourcing platforms like EquityMultiple can automatically verify whether a potential investor is an accredited investor or a qualified purchaser.
Private Equity Space
Investors are finding many deals to consider as the private equity revival continues. Global private equity dry powder reached a record high of $3.7 trillion in 2022. Many companies and projects turn to private equity firms when there is so much money available.
Private equity firms are experts at managing and building an M&A pipeline. They also have the experience and expertise to pinpoint the best opportunities for their portfolios. Their primary goal to generate returns for investors is to buy out existing companies and put them back on track to success.
The definition of an accredited investor is more relevant today than ever. This status allows individuals to access more sophisticated investments such as funds with over 100 investors or 3(c)(7) Private Equity offerings. This is because accredited investors can demonstrate a higher net worth and a more consistent income.
This can be done by releasing W-2s, tax returns, and investment portfolio statements which prove that an individual's or organization's net worth is greater than $1 million (excluding their primary residence), or their earned income is more than $250,000 per year. Some investment platforms or issuers require accredited investors or qualified purchasers to re-verify status at specific intervals. For example, every 12-24 months.
It can take a lot of time to create an accredited investor's list. It takes a lot to get the right people interested in your firm. Accredited investors are required to have a net worth of at least $1 million, excluding the value of their principal residence. These investment heavyweights can be a great asset…