"Accredited investor" is a legal term, coined by the Securities and Exchange Commission, which refers to someone with a certain amount of investor savvy or sophistication. Specifically, the SEC defines an accredited investor as someone with a net worth of at least $1 million, an annual income above $200,000 or a joint annual income of $300,000. This is an important consideration when searching for people to invest in your business venture as it is against the law to raise money from more than 35 non-accredited investors. The hard part is knowing where to look for these high net worth investors.
Contact a broker/dealer registered with the SEC. While he may not be able to provide you with information about clientele, under the Exchange Act a broker/dealer can purchase investment securities for its own account and can be considered an accredited investor.
Work with a banker or financial adviser to find qualified trusts. A trust with assets in excess of $5 million is considered an accredited investor as long as the trust was not created for the sole purpose of investing in your business venture.
Talk to non-profit, charitable organizations, corporations or other business partnerships. If their combined assets exceed $5 million, the entity is considered to be an accredited investor. Fund raising or development is the best place to locate qualified donors in non-profit organizations.
Use the funds from a director, executive officer or partner of the company wishing to attract funds. These people, while connected to the venture, can be included in the pool of accredited investors for the offering.
Contact local angel investors. Angel investors are investors that are interested in providing start up financing for new businesses. They also usually know other potential accredited investors. Presenting to angel investors is also a great way to gain experience with presenting your ideas.