Sophisticated Investor

If you are reading this article, chances are you are looking for more information on a sophisticated investor. That’s where we come in! Accredited Investor Leads has been in the lead business for over 30 years specializing in accredited investors, so we know a thing or two.

What is a sophisticated investor?

The main thing to remember is that a sophisticated investor is not the same thing as an accredited investor. The SEC put out a ruling in 1975 that states that anyone with an investment net worth which exceeds $1 million AND annual income of over $200,000 OR joint income with a spouse in excess of $300,000 is considered an accredited investor. So far, it seems as though this is still standing.

What’s the difference between an accredited and a sophisticated investor?

An accredited investor is one that has met the requirements to be deemed as such. While a sophisticated investor is one who has extensive knowledge or experience in financial markets. They are investors that have been around for at least five years and have made more than four investments. These investments can be stocks, bonds, options, CDs, mutual funds, private placements, etc. They also can include any combination of these aforementioned instruments as well as real estate and precious metals.

Why are sophisticated investors so important for businesses?

Sophisticated investors are very important for businesses because they tend to carry a lot more wealth with them than most people do. If you have a product that is created to appeal to a sophisticated investor, they are likely to be very interested in investing. While they may not be able to put up $100,000 or more right now if you can capture their interest and get them hooked on how great your business is, then one day they will likely come back with a bigger check.

What type of investors are sophisticated investors?

The investor classifications of a sophisticated investor tend to be more diverse than the average investor. Do not base your business on this piece of information, but you should use it as a guide. When sophisticated investor makes an investment, they typically put in between $100,000 and $300,000 at most. More than likely they will be looking at one property to flip but not putting up any money themselves. They are considered active investors whereas the rest of the population is considered passive investors.

If you want to learn more about sophisticated investors, or you are curious about our lead options, contact us today!