The infographic below comes from VerifyInvestor – a company that is in the space of verifying accredited investors who may participate in private placements. As part of Title II of the JOBS Act there are verification requirements to participate (you just can’t promise to be wealthy). The information below is a great high level description of the requirements and options for verification.
Of course in the long run many of us hope the SEC will see the light and realize the current definition is rubbish and that accreditation does not equal sophistication. Some industry followers (myself included) expect the process to evolve where an individual may take a brief test to confirm he or she understands the risk associated with investing their hard earned money. Until that time though – you got to prove it.
H/T JL Law