What is the difference between a qualified and a non-qualified investor?

A qualified investor is someone who can be sold investments without the need for the seller to provide additional disclosures, such as a prospectus or other detailed information. In the state of Virginia, a qualified investor is defined as someone who has earned income of over $200,000 (or $300,000 jointly with a spouse) for the past two years, or someone who has a net worth exceeding $1 million (not including a primary residence). In contrast, a non-qualified investor does not meet the qualifications for a qualified investor, so the seller must provide the non-qualified investor with the necessary disclosures before completing the sale of a security. These disclosures offer investors more protection against investment fraud because the non-qualified investor can make a more informed decision with the additional information. Non-qualified investors may include individuals with lower incomes or net worths, as well as non-accredited investors such as corporations or trusts.

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What is the difference between a qualified and a non-qualified investor?

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