Rung 2 — Accredited Investor Threshold
mechanism
There's a legal wealth line that decides who gets into the lucrative private-investment club and who's locked out.
Who they are
The 'accredited investor' threshold is an SEC rule marking the first legal gate into the exempt private-capital system.
What they do
It sets the wealth or income bar you must clear to invest in private deals ordinary people can't touch.
How it works
You qualify with a net worth over $1 million (not counting your home) or income over $200,000 (or $300,000 with a spouse) for the prior two years; note the requirement actually comes from the Reg D offering exemption, not from the Investment Company Act's own test, which just limits a fund to 100 owners.
Why it matters
It matters because this line legally separates who can access the wealthiest private investments from who cannot, a concrete rung on a caste-like ladder.
The engine's record — word for word
[Report #114 — Caste Ladder] [web-checked Jun 18 2026] SEC accredited investor: net worth >$1M EXCLUDING primary residence, OR income >$200k ($300k joint) over the prior two years (Reg D, Rule 501). The first legal gate into the exempt private-capital system. MECHANISM NUANCE: the accredited requirement is imposed by the Reg D 506(b)/506(c) OFFERING exemption, not by Investment Company Act 3(c)(1) itself — 3(c)(1)'s own test is <=100 beneficial owners (250 for qualifying VC funds), no public offering.
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