If a company is asking for investors with a net worth of $1M, can that net worth be collectively, i.e., investment club members?

  • The club's assets are split across multiple members, so this would be like claiming your NW is a trillion dollars because you own some shares of Apple stock.
    – RonJohn
    Commented Jan 9, 2020 at 21:12
  • 2
    @RonJohn I think the question is can the club be considered "an investor".
    – D Stanley
    Commented Jan 9, 2020 at 21:53
  • 1
    @DStanley maybe. OP would have to clarify.
    – RonJohn
    Commented Jan 9, 2020 at 22:00

2 Answers 2


When you state net worth of $1 Million, it sounds like the limit set in the US by the Securities and Exchange Commission for a Accredited Investor which is set at $1M net worth excluding primary residence for Natural Persons.

Assuming the Investment Club qualifies by not being formed just to purchase a specific security, such a club would need assets of at least $5M.

From the above link:

Who is an accredited investor?

An accredited investor, in the context of a natural person, includes anyone who:

  • earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, or

  • has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).

There are other categories of accredited investors, including the following, which may be relevant to you:

  • any trust, with total assets in excess of $5 million, not formed specifically to purchase the subject securities, whose purchase is directed by a sophisticated person, or
  • any entity in which all of the equity owners are accredited investors.

In this context, a sophisticated person means the person must have, or the company or private fund offering the securities reasonably believes that this person has, sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.


Probably not initially, but it will depend on how desperate they are later. Consider the probable reason for the $1M requirement. They want low-hassle investors who will follow through.

They don't want someone who initially thinks that they can invest $100k, but later decide they really can't afford to. They also want someone with reserves, who could invest more later in a crunch, or invest more later to enable more rapid growth.

Your investment group will be high-hassle, one person can't make the decisions. The paperwork will be more complicated, and your group will need to vote on everything.

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