Accredited Investor Questionnaire: What It Asks and Why

An accredited investor questionnaire asks an investor which test in SEC Rule 501(a) they meet: income, net worth, a professional license, an insider role or, for an entity, its assets or owners. Most also ask how the investor will hold the interest, where they live, their tax status and whether retirement money is involved. In a 506(b) deal the answers support your reasonable belief that the investor is accredited; in a 506(c) deal a signed questionnaire by itself is not verification.

This post walks through the questions a typical questionnaire asks and why each one is there. It is written for a first-time sponsor who wants to know what investors will see and what the answers are for.

What is an accredited investor questionnaire?

It is a form the investor fills out and signs, usually as part of the subscription agreement, before you accept their money. It records which accredited investor test they meet and gives you the facts other rules need.

It is not a law. No rule spells out its questions. Sponsors use it because Rule 506 requires every buyer in a 506(c) deal to be accredited, and every non-accredited buyer in a 506(b) deal to meet extra conditions. You need a record of who is who.

Which questions cover individual investors?

Each question below turns one Rule 501(a) test into something an investor can answer. The thresholds come from the rule. See our guide to the accredited investor definition for the details of each test.

Question on the form	Rule 501(a) test	Why it is asked this way
Was your income over $200,000 in each of the last two years, and do you expect the same this year?	501(a)(6)	Both years must clear the line, plus a reasonable expectation for the current year
Was your joint income with a spouse or spousal equivalent over $300,000 in each of those years?	501(a)(6)	A couple can qualify together even if neither qualifies alone
Is your net worth over $1,000,000, alone or with a spouse or spousal equivalent, not counting your primary residence?	501(a)(5)	The home is left out, and certain recent borrowing against it counts as a debt
Do you hold a Series 7, 65 or 82 license in good standing?	501(a)(10)	The SEC designated these licenses in 2020
Are you a director, executive officer or general partner of the issuer?	501(a)(4)	Insiders of the company selling the securities qualify
Are you a knowledgeable employee of the fund?	501(a)(11)	Applies to private funds, rarely to a single apartment deal

Good forms explain the net worth rule right on the page. The rule leaves out the primary residence and the mortgage on it up to the home's value, but debt above the home's value counts as a liability, and so does new borrowing against the home in the 60 days before the sale unless it was used to buy the home. Investors get this wrong more than any other test.

Which questions cover entities, trusts and IRAs?

An LLC, trust or retirement account answers a different set of questions. The main entity tests in Rule 501(a) are:

Total assets over $5,000,000 for listed entity types (such as corporations, partnerships, LLCs and certain charities), not formed to buy the securities offered (501(a)(3)).
Investments over $5,000,000 for any entity type not listed elsewhere, not formed to buy the securities (501(a)(9)).
A trust with assets over $5,000,000, not formed to buy the securities, whose purchase is directed by a sophisticated person (501(a)(7)).
Every equity owner is accredited (501(a)(8)). The form then asks each owner to answer the individual questions too.
Family offices and their clients with more than $5,000,000 under management (501(a)(12) and (13)).

The question "was this entity formed for the purpose of buying these securities?" matters. A new LLC set up just to invest in your deal cannot use its own assets to qualify. It usually has to qualify because all of its owners are accredited. For how investors hold interests through an LLC, trust or IRA, see investing through an LLC or trust.

What other questions do questionnaires usually include?

Most questionnaires collect facts that other rules need, so the investor answers once.

State of residence. Each state where an investor lives may need a notice filing and fee. See blue sky notice filings.
Tax status. Whether the investor is a US person, plus a taxpayer ID, so the deal can issue K-1s and apply any withholding.
Benefit plan money. Whether the money comes from an IRA, a 401(k) or another plan. If benefit plan investors hold 25% or more of a class of interests, the deal's assets can become plan assets. See our post on the ERISA 25% test.
Large voting owners. Anyone who will own 20% or more of the issuer's voting equity becomes a covered person under the bad actor rule, so some forms ask those investors the bad actor questions.
Investment experience. In a 506(b) deal that admits a non-accredited buyer, the sponsor needs to reasonably believe that buyer is sophisticated. Experience questions support that.
Third-party financing. For the high minimum path in a 506(c) deal (below), the investor states in writing that the minimum is not financed by a third party for this investment.
Acknowledgments. That the investor read the documents, understands the interest cannot be easily sold and can afford to lose the money.

Is a questionnaire enough for 506(b) and 506(c)?

It depends on the exemption.

Rule 506(b). Rule 501(a) counts someone as accredited if they meet a test or the issuer reasonably believes they do. A completed, signed questionnaire, read with what you already know about the person, is the usual basis for that belief. No documents are required by the rule. If something in the answers does not fit what you know, ask before you accept the money. See 506(b) vs. 506(c).

Rule 506(c). The issuer must take reasonable steps to verify that every buyer is accredited. In the 2013 adopting release, the SEC said an issuer would not have taken reasonable steps if it required only that a person check a box in a questionnaire or sign a form, absent other information. So in 506(c) the questionnaire is the starting point, and verification comes from something more: tax forms, account statements with a credit report, a letter from a CPA, attorney, registered adviser or broker-dealer, or other reasonable steps. The rule's list of methods is in 17 CFR 230.506(c)(2)(ii).

In March 2025, SEC staff issued a no-action letter saying an issuer may reasonably conclude it took reasonable steps when the investor commits at least $200,000 (a natural person) or $1,000,000 (an entity), states in writing that they are accredited and that the minimum is not financed by a third party for this investment, and the issuer has no actual knowledge to the contrary. That is staff guidance, not a rule. Here the written statements in the questionnaire do real work, so word them exactly. See accredited investor verification.

A made-up example

This example is made up. A sponsor raises $1,500,000 under Rule 506(c) and receives three questionnaires.

Investor	Answer on the form	Commitment	What the sponsor does next
A, individual	Net worth over $1,000,000	$250,000	Meets the $200,000 staff letter minimum; collects the written statements on accreditation and financing
B, married couple	Joint income over $300,000 both years	$100,000	Below the minimum, so collects two years of tax forms and a statement about this year
C, LLC formed last month	All owners accredited	$150,000	Below $1,000,000, so verifies each owner individually

The three commitments total $250,000 + $100,000 + $150,000 = $500,000. The questionnaire told the sponsor which path to use for each investor. It did not verify anyone by itself.

Common mistakes

Treating the form as verification in 506(c). It is not, unless the high minimum conditions are met.
Asking for more than a rule needs. Long forms slow investors down. Ask what the exemption, taxes, states and plan rules require.
Ignoring answers that do not fit. A box that conflicts with what you know defeats a reasonable belief.
Skipping the entity purpose question. A new LLC usually qualifies only through its owners.
Not updating it. If a second closing comes months later, confirm the answers still hold.

How DoorRaise fits in

DoorRaise helps sponsors raise equity for apartment buildings with 5+ units from their friends and followers under Rule 506(b) or 506(c). DoorRaise prepares the standard offering documents, forms the LLC, files Form D and state notices, and verifies accredited investors for 506(c) deals. Escrow is at Enterprise Bank & Trust, an FDIC-insured bank, investors fund by wire only and distributions are quarterly by default. Fees are $1,500 at setup (non-refundable), $5,000 at closing (only if the deal closes) and $3,500 a year, with no percentage of the raise and no part of the promote. DoorRaise is not a law firm, broker-dealer, investment adviser, funding portal or bank, and the sponsor stays responsible for deciding who may invest.

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FAQ

Does an investor have to fill out a new questionnaire for every deal?

Usually yes, because each deal is a separate offering and the investor's facts can change. Some sponsors prefill answers from the last deal and ask the investor to confirm or correct them.

Can an investor lie on the questionnaire?

They can, and that is why 506(c) requires more than the form. In 506(b), a false answer does not automatically break the exemption if your belief was reasonable, but ignoring red flags can.

Is a questionnaire the same as KYC?

No. KYC confirms who the person is, and the questionnaire records whether they qualify. Many sponsors collect both. See KYC and AML for syndication investors.

Do sponsors and their partners fill one out?

If they invest in the deal, yes. A director, executive officer or general partner of the issuer qualifies under Rule 501(a)(4), but the record should still say so.

Next step: read accredited investor verification for 506(c) deals to see what counts as reasonable steps beyond the form.

Sources

This article is general information, not legal, tax or investment advice. Talk to a securities attorney about your deal. DoorRaise is not a law firm, broker-dealer, investment adviser or funding portal.