How to verify accredited investors for a 506(c) raise, step by step

By Zach Schleien

The verification methods Rule 506(c) lists, who can write a verification letter, the March 2025 high minimum option, and how to build it into your investor funnel.

To verify accredited investors under Rule 506(c), you have to take "reasonable steps" to confirm each investor qualifies, and the SEC says a checked box on its own isn't enough. The rule lists ways that count for individuals: review their IRS income forms, review asset statements and a credit report dated within the last three months, get a written letter from a registered broker-dealer, SEC-registered investment adviser, attorney or CPA, or rely on your own earlier verification of the same person for up to five years, with a new written statement from them.

I'm a marketer, not a lawyer or a broker-dealer. I built the investor acquisition system for a real estate sponsor raising for a nine-figure project under Rule 506(c), from Meta ads all the way to investor calls. This guide covers what the SEC's own pages say about verification, and how to build it into your investor funnel so qualified people don't fall out at the end. Check your own offering with securities counsel before you act on any of it.

Raising capital under Rule 506(c)? I build the investor funnel: ads, an accreditation page, an investor webinar and a setter team. Qualified investor leads ran $35 to $58 for one sponsor. Book a call about your raise.

Key takeaways

• Rule 506(c) requires "reasonable steps to verify" that every purchaser is accredited. Rule 506(b) uses a different standard, a "reasonable belief."
• The SEC says self-certification alone, like checking a box, doesn't meet either standard unless you have other information about the investor.
• The methods the rule lists for individuals include income documents, net worth documents, a third-party letter, and a written statement from someone you verified in the last five years. They're optional, not the only ways.
• In March 2025, SEC staff said a high minimum investment, plus certain written statements from the investor, can support verification. The request letter it answered described $200,000 for individuals and $1,000,000 for most entities.
• A quiz on your landing page is screening, not verification. You still need to verify each purchaser.

What "reasonable steps" means

The SEC's page on assessing accredited investors explains the difference between the two Rule 506 options. Under 506(b), you need a "reasonable belief" that an investor is accredited. Under 506(c), you need to take "reasonable steps to verify" it. I compared the two options side by side in 506(c) vs 506(b): what's the difference, and which one should you use for your raise?

The SEC calls the 506(c) standard principles-based. You make an objective call about whether your steps were reasonable, and the page lists what to weigh:

• Who the investor is, and which type of accredited investor they say they are.
• How much information you already have about them.
• The nature of the offering, including how you found the investor and terms like the minimum investment.

That last point matters for sponsors who advertise. If someone found you through a Facebook ad, you probably know very little about them, so you'll lean on documents or a third-party letter.

Who counts as an accredited investor

Before you verify, you need to know what you're checking for. Under Rule 501(a), an individual generally qualifies with:

• Income over $200,000 in each of the two most recent years, or joint income with a spouse or spousal equivalent over $300,000 in each of those years, and a reasonable expectation of the same level this year.
• Net worth over $1,000,000, alone or with a spouse or spousal equivalent, not counting their primary residence.
• A Series 7, Series 65 or Series 82 license in good standing.

Entities qualify in other ways. Examples include corporations, partnerships and LLCs with total assets over $5,000,000 that weren't formed to buy the offering, entities where all equity owners are accredited, and family offices with over $5,000,000 under management that meet the rule's conditions.

One update to watch. On September 30, 2026, the SEC issued notices that would add more credentials, including the CFA charter, the CPA license, the CFP certification, Series 79, 86 and 87 licenses, and a FINRA accredited investor exam. These were notices asking for public comment, not final orders, on the pages I read. Don't treat them as final until the SEC issues the orders.

The verification methods the rule lists

Rule 506(c) lists methods for natural persons. The rule says they're optional, and they only work if you don't know of anything that says the person isn't accredited.

Income

Review IRS forms that report the investor's income for the two most recent years. The SEC's page names forms like the W-2, 1099, Schedule K-1 of Form 1065 and Form 1040. Then get a written statement from the investor that they reasonably expect to reach the same income level this year.

If the investor qualifies on joint income with a spouse, the rule's instructions call for the documents and statements from both spouses.

Net worth

Review documents dated within the prior three months. For assets, that means things like bank statements, brokerage statements, CD statements and tax assessments. For liabilities, the rule calls for a consumer report from a nationwide consumer reporting agency. Then get a written statement from the investor that they've disclosed all their liabilities.

Remember that the primary residence doesn't count as an asset.

A third-party letter

Get written confirmation from one of these:

• a registered broker-dealer
• an SEC-registered investment adviser
• a licensed attorney in good standing
• a registered certified public accountant in good standing

The letter has to say that person took reasonable steps to verify the investor within the prior three months and found that the investor is accredited.

This option is useful for investors who'd rather not send their tax returns to you. They can send them to their own CPA or attorney instead.

Investors you've already verified

If you verified someone before, you can get a written statement from them at the time of sale that they're still accredited. As long as you don't know anything to the contrary, the SEC's page says this satisfies the requirement for five years from the earlier verification.

A lot of sponsors set up a new entity for each deal. If you do, ask your counsel whether an earlier verification by a different entity counts for you.

The high minimum investment option

On March 12, 2025, the SEC's Division of Corporation Finance responded to a request letter about high minimum investments. The staff wrote: "We agree that a high minimum investment amount is a relevant factor in verifying accredited investor status."

The request letter described minimums of $200,000 for individuals and $1,000,000 for most entities. The investor gives written statements that they're accredited and that the minimum isn't financed in whole or in part by a third party for this specific investment. If you have no actual knowledge of facts that say otherwise, the staff said you could reasonably conclude you took reasonable steps.

Two limits. The staff's response says it "has no legal force or effect," and that different facts could lead to a different conclusion. If your minimum check is lower than what the letter describes, this path doesn't match your deal, so use one of the methods above and ask your counsel.

How to build verification into your investor funnel

Verification is a legal step, but it's also a marketing step. If it surprises people at the end, you lose investors you already spent money to find.

On the raise I worked on, the investor site had a 506(c) accreditation page and a quiz that screened for LP, accredited and minimum check. That's screening. It tells you who to call. It doesn't verify anyone.

Here's what I'd build:

1. Explain accreditation in plain words on your landing page, before anyone books a call. Say that you'll need to verify it, and what that usually involves.
2. Ask the screening questions up front. Make sure the quiz covers whether they're accredited and whether they can meet your minimum.
3. Follow up fast. When someone downloaded the investor deck, a setter called them within the hour.
4. Offer the investor a choice at closing: send documents, or have their own CPA, attorney, registered broker-dealer or SEC-registered investment adviser send a letter.
5. Keep a record of what you reviewed and when, so you can show your steps later. Your counsel can tell you what to keep.

On that raise, the accreditation page pass rate went from about 4% to 15 to 18%, roughly 4x. Qualified investor leads came in at $35 to $58, against a published $150 to $480 for accredited investor leads through paid digital. The rest of that funnel, from the first ad to a booked call, is in Raising capital for real estate: how sponsors find investors beyond their network.

Compliance was part of the funnel, not a step after it. We had written approvals on the legal questions before launch, a disclaimer on every ad, and no ad ever stated a hard return.

Mistakes that cause problems

• Treating a checkbox or a quiz as verification. The SEC says self-certification alone isn't enough.
• Using old documents. Net worth documents and third-party letters need to be from within the prior three months.
• Counting the primary residence in net worth.
• Forgetting the second spouse's documents when an investor qualifies on joint figures.
• Assuming a proposed credential already qualifies. The September 2026 notices weren't final orders on the pages I read.
• Leaning on the high minimum investment letter when your minimum is lower than the amounts it describes.
• Leaving verification to the last day. Give investors time to gather documents or get a letter.

This is general information from a marketer, not legal advice, so check your offering with securities counsel.