The 'due diligence' consists of getting the investor to fill in and sign a form affirming that they meet the criteria. No evidence is required. I know because I did exactly this just last year to invest in a New York based business.
So what though? We're not arguing over how simple or onerous the due diligence process is. Whatever it is, whether it's as simple as just checking a box or as difficult as walking on the moon, it is something that needs to happen before you are "accredited". Households that don't go through that process aren't accredited, even if they're worth a trillion dollars. It's as simple as that.
>Households that don't go through that process aren't accredited
>(a) Accredited investor. Accredited investor shall mean any person who comes within any of the following categories, <etc.>
Persons that meet the definition of an 'accredited investor' per 17 CFR § 230.501 are accredited. Attestations, diligence, etc. are irrelevant to that fact as defined by law. There is nothing that needs to happen above and beyond the criteria as spelled out.
Have 999,999$ net worth? not accredited. Find a dollar bill on the street? Accredited. Spend 1$ on a coffee (ha..)? No longer accredited.
Well if you define accredited investor to include someone who has neither been accredited by anybody nor actually investing in anything then I have no idea. That doesn't strike me as a reasonable definition but who knows.
> means you are not accredited until you have due diligence done on you.
Incorrect.
You are accredited if you meet the income, asset, or professional certification tests.
People selling you certain securities are required to make a good faith effort to confirm thar you are accredited before selling to you, but (whether or not another firm has done so), but this has no bearing on whether you are accredited, in the same way that whether you are a citizen, lawful permanent resident, or work-authorized alien doesn't depend on whether or not an employer of yours has done their duty in regard to I-9 employment eligibility verification.
Background: I'm an accredited investor, having taken people's money who were both accredited and unaccredited and work in financial services.
There is no governing body that gives you a stamp of approval towards accreditation. It's basically only "enforced" if you get caught.
So, no, there's not practically "more to it" than checking a box. The most stringent I've seen is a notarized letter from my accountant (rare) and the least stringent I've seen is that the startup owner never asked.
> Instead, the companies that issue unregistered securities determine a potential investor’s status by conducting diligence prior to sale.
means you are not accredited until you have due diligence done on you.