What is a certified HNWI and a certified sophisticated investor?
There is a regulatory framework for angel investing that both protects the Angel and the entrepreneurs.
Before receiving business plans or beginning to make angel investments, you should ensure that you are self-certified as either a High Net Worth or Sophisticated Investor, as defined by the FCA under the Financial Services and Markets Act 2000 (FSMA).
As an individual angel under the FCA Financial Promotions Order you are entitled to receive business plans and make investments through your own decision, provided that you are able to certify yourself as either a high-net-worth Individual or a sophisticated investor.
A certified high net worth individual
You confirm that you either:
- have an annual income in excess of £100K or
- have net assets in excess of £250K beyond your pension fund assets and your private residence
A certified sophisticated investor
You confirm one of the following:
- You have been a director of a company turning over at least £1 million within the last two years
- You have made more than one investment in an unlisted company in the last two years
- You have been a member of a network or syndicate of business angels for at least six months
- You have worked in the past two years in a professional capacity in the private equity sector or in the provision of finance for small and medium enterprises