As laid out in Section 708 of the Corporations Act 2001 (Cth), the term Sophisticated Investor describes a category of investor that can be offered securities without needing a prospectus or other regulated disclosure documents.
The rationale behind this classification is that Sophisticated Investors — also often referred to as "high net worth individuals" and "708 investors" — are considered to have sufficient investment knowledge and experience to make informed decisions regarding a new offer of securities without requiring the protection of a prospectus.
What criteria is used to identify Sophisticated Investors?
To satisfy the requirements for being classed as a Sophisticated Investor, you will have either:
- A gross income for each of the last two financial years of at least $250,000; or
- Net assets of at least $2.5 million.
What are the benefits of being a Sophisticated Investor?
Ultimately, qualifying as a Sophisticated Investor means increased access to opportunities.
As a Sophisticated Investor, you can be offered investment opportunities that aren't usually available to retail investors. These deals can come in the form of pre-IPO offers, hedge funds, property syndicates, and unlisted securities like capital raisings or seeding opportunities for private companies.
These offers are also often priced at a discount to the current share price.
These kinds of early stage opportunities have the potential to deliver high returns, but it should be noted that they are also often higher risk.
How do I become verified as a Sophisticated Investor on the Raisebook platform?
We've made verification quick and simple for you.
To show that you are a verified Sophisticated Investor, you will need to provide a certificate from a qualified accountant, verifying that you satisfy the above criteria. This certification must be no more than two years old.
To speed up the process, you can download a certificate pro forma.
Are you a Sophisticated Investor?
Enter your details and receive access to a range of early stage investment opportunities.