Accredited investor self-certification, explained

Every angel’s first surprise: for most startup rounds, nobody checks. You receive a questionnaire, you check a box saying you’re accredited, you sign, and the wire instructions arrive. No tax returns, no bank statements, no verification service. That’s not sloppiness — it’s exactly how Rule 506(b) is designed. Understanding what that checkbox does — and when it stops being enough — is baseline literacy for writing checks.

Who counts as accredited

The SEC’s Rule 501 definition, in its common individual forms:

Route	Threshold
Income	$200k+ individually (or $300k+ jointly) in each of the last two years, with the same reasonably expected this year
Net worth	$1M+ excluding your primary residence
Professional credential	Certain active licenses — Series 7, 65, or 82

Entities qualify through their own thresholds (assets over $5M, or all owners accredited). The definition’s logic is blunt: the securities laws’ protective machinery is switched off for people presumed able to bear the loss and fend for themselves. Accreditation isn’t a compliment or a skills badge — it’s a risk-bearing test.

What the checkbox legally does

Under 506(b), the issuer needs a reasonable belief that you’re accredited. Your written representation — the questionnaire — is what makes the belief reasonable. Legally, the checkbox is you taking on the statement: the representation is yours, typically with indemnification language behind it. The founder isn’t being casual by not checking; the rule allocates the truth-telling to you.

Under 506(c) — rounds that advertise publicly — self-certification is explicitly insufficient. The issuer must take reasonable verification steps: your tax documents, account statements, or a letter from a CPA, attorney, broker-dealer, or registered adviser. If a publicly-promoted deal accepts a bare checkbox, that’s not convenience; that’s a compliance smell — the exemption letter on the Form D tells you which regime you should be experiencing.

The self-audit worth doing once

Because the representation is yours, the diligent move is auditing yourself before your first check: which route do you actually qualify under, and would you be comfortable evidencing it if a 506(c) round asks? The income test is two consecutive years plus an expectation; the net-worth test excludes the house. Professionals near the thresholds — the attorney, consultant, and doctor who make up so much of the emerging angel class — are often solidly accredited by income, marginal by net worth, and have simply never run the numbers. Ten minutes, once, and you know which questionnaires you can sign without a flutter.

Some platforms formalize exactly this: a structured self-certification at onboarding — which route, attested once, on record — so each subsequent deal isn’t a fresh improvisation. However it’s done, the principle is the same one that governs good diligence in the other direction: attestations are cheap; being the person whose attestations are reliable is an asset. The angels founders save slots for are the ones whose paperwork never wobbles.