An accredited investor is an individual or an entity recognized by financial regulations as being sufficiently knowledgeable and financially capable to engage in investment activities that involve significant risks. This status is defined by criteria such as an annual income exceeding $200,000 for individuals (or $300,000 for married couples) for the last two years with the expectation of the same or higher income in the current year, or a net worth over $1 million, excluding the primary residence.