“Accredited Investor” is an essential concept for Equity Financings and Debt Financings. In general, it is recommended that Privately-Held Companies issue and sell Securities only to Accredited Investors in order to avoid burdensome disclosure requirements and other potential issues that impact whether or not the financing is exempt from registration pursuant to the Securities Act of 1933.   The criteria for whether an Investor qualifies as an Accredited Investor is included in Rule 501 of Regulation D to the Securities Act of 1933, and includes, among other categories: (i) a wealthy individual (i.e., with a net worth of at least $1 million excluding primary residence, or $200,000 in annual income (or $300,000 in annual income with spouse) for the past two (2) years and a reasonable expectation of the same income in the following year); or (ii) a financially sound legal entity as outlined in Rule 501 (i.e., generally total Assets of at least $5 million).