InvestReady works with issuers and investors to verify investors are accredited under US law and SEC regulations. We verify both individuals and entities, although all of our accounts must be under the name of an individual (multiple entities may be added under a single individual).
For individuals, investors have three options. They can be verified via income, net worth, or through a third party letter.
For income, investors must provide us with proof of at least $200,000 USD in individual income or at least $300,000 USD in joint income for each of the past two full years. They’d prove this by either having us contact the IRS on their behalf by filling out information that we require, or by uploading IRS documents directly to us such as 1040s, W2s, 1099s, or K1s. If they don’t have their latest year's docs ready, they can use the documents for the previous two years and also give us an estimate of their latest full year income (for example, investors in 2018 would be required to show us 2017 and 2016 proof of income, but if 2017 tax documents are not yet ready, they would need to show us 2016 and 2015 proof of income as well as an estimate of 2017 income). If they are not US-based, they would need to choose the upload option and the tax documents should be from an entity similar to the IRS in the respective country they are from.
For net worth, investors must provide us with proof of at least $1MM USD net worth excluding their primary residence value. The documents they provide must be dated within the past 90 days and the verification will only last 90 days from the earliest asset we use to verify them. We’re also required to review a credit report. They would provide this by uploading asset documents such as statements through our system. We also have specific instructions for how to submit crypto assets. If they are US-based, we’ll pull a credit report from them on our end from TransUnion (soft-pull, doesn't affect credit). If they aren’t, we’ll need them to send us one directly (for more information click here).
For third party letters, investors must provide us with a letter signed by a licensed CPA, attorney, broker-dealer or registered investment advisor. The first two can be licensed outside the US whereas the last two must be US licensed. The letter must state that the verifier has taken reasonable steps to determine the investor is accredited, and it must be dated within the past 90 days (and will expire 90 days from that date). They can either upload their own letter or can request a verifier via email through our system.
For entities, investors must provide us proof the entity has assets under its control of at least $5MM or the entity is owned by all accredited investors. Right now, the way we do entities is just like we do for third party letters. If someone doesn't have an eligible third party they can use to verify their entity, we can work with them to verify the entity directly (simply email us at email@example.com).