What is an accredited investor?
The concept of an accredited investor is to help identify persons who can bear the economic risk of investing in private securities.
An individual can be considered an accredited investor by satisfying one of the following requirements::
Income Qualification - In the U.S., an accredited investor must have earned income that exceeds $200,000 USD or foreign equivalent (or $300,000 together with a spouse) in each of the two previous years.
Acceptable documentation for evidence of income: tax returns, W2's, or other government filings from the last two years.
Accredited Investor Verification Letter - Per U.S. laws, an accredited investor must provide a letter from your attorney, CPA, registered investment advisor or registered broker qualifying you as an accredited investor.
The written confirmation provided must certify that reasonable steps were taken to verify that the investor is an accredited investor within the prior 90 days and that it was actually determined that such investor is an Accredited Investor.
We will ask for your third party's information (full name and email) in order to send them a digital letter to sign and confirm your accredited investor status.
Net Worth - Per U.S. laws, an accredited investor must have a net worth over $1 million USD or foreign equivalent excluding the value of your primary residence.
How do I verify my accredited investor status via a third party professional?
In order to verify your accredited investor status via a third-party professional, you will need to get your lawyer, accountant, broker, or registered investment advisor to sign an auto-generated accredited investor verification letter to confirm your status. Harbor will ask you to provide the name and email address of your third-party professional; they will receive an email from Harbor to digitally sign the accredited investor verification letter.
Third-party professionals outside of the U.S. may need to provide evidence of their license and good standing and additional supporting documentation upon request.
How frequently do I need to update accreditation information?
Typically, once your accreditation verification is submitted, you will need to update your accreditation documentation once per year. If you verify your accreditation status based on income, please note that the verification is for the past two tax years, so your verification will be valid until the following “Tax Day.”
For example, if you validate your status based on 2016 and 2017 W2 information, your status will be valid until April 15, 2019 (Tax Day), at which point you would need to submit 2018 income verification.
If you verify your accreditation status based on net worth, provided all statements are current, your status will be valid for one year from the date the documentation was verified. Finally, if you verify your accreditation status via a third party, your verification will be valid for one year from the date the verification letter was submitted, unless otherwise stated.
What documentation must I provide to confirm accreditation if I am investing on behalf of an entity?
If not providing third party verification, all entities must provide the operating agreement of their entity. If the investor is not the sole owner of the entity, all owners must be accredited or have assets in excess of $5M.
How long does accredited investor verification take?
Normally, accredited investor verification takes two to three business days to complete as long as the investor submits the necessary documentation.
The required documentation is different depending on the method of verification you choose. For example, if you select the income qualification test; acceptable documentation includes tax returns, W2's, or other government filings from the last two years.
The reviewer of your documentation may ask you to upload additional evidence as necessary.
There is no way for RAC to expedite the accredited investor verification of your account. If you have not received any update after three business days have passed, please log-in and contact our support team.
How can I make my account more secure?
RAC has required all accounts to use 2-step verification to access your account. The addition of this extra step during login to authenticate your identity makes it harder for an unauthorized user to access your account.
Make sure to use a unique password that you only use for your RAC account.
Avoid phishing scams by being aware of the signs: How can I prevent phishing scams?
RAC will never ask you for your login information such as your password or Google Authenticator code. Please reach out to our customer support team immediately should someone request this information from you.
How do you protect my information?
We care about the security of your information and employ physical, administrative, and technological safeguards designed to preserve the integrity and security of all information collected through our Website. These measures are designed to appropriately protect Personal Information against accidental or unlawful destruction, accidental loss, unauthorized alteration, unauthorized disclosure or access, misuse, and any other unlawful form of processing of the Personal Information in our possession. However, no security system is impenetrable and we cannot guarantee the security of our systems or your Personal Information.
Do these investments have risk?
Like any investment, investment offerings on RAC carry investment risk, which should be evaluated on a case-by-case basis and prospective investors are urged to read the risk factors for each applicable offering. We strive to list investments on RAC that are backed by strong collateral,provide attractive returns and have low correlation to the overall stock market.
Moreover, RAC works to assess investment risk by having a stringent process for vetting our borrowers and originators, and we make each deal transparent to our investors. Our diligence process includes vetting the management team of the originator in addition to their experience and expertise in the asset type. We are highly selective on the originators that we choose to work with. Originators typically have several years of experience. RAC has a thorough vetting process through third parties that evaluates our originators’ financials, track record, and more factors.
Here are a few other risk factors you should be aware of:
Default Risk: The risk that the borrower will not be able to repay the associated interest and principal on a particular loan.
Principal Risk: The possibility that a lender won’t get back some or all of the principal balance, the amount that they had originally invested.
Duration Risk: The borrower could pay back the loan amount earlier or later than the expected offering length. All durations associated with RAC investment offerings are “target durations” and while we do everything we can to hit those targets, in certain situations, an offering can end or extend before or after that target duration.
Inconvenience Risk: Investors will not have access to their funds until the investment fully matures, thus reducing liquidity. In addition, some of our litigation investment offerings produce event-based payments which reduce payment schedule predictability.