The best private equity investments are open only to those who are "accredited." The rationale is to protect inexperienced investors from making terrible investment mistakes. In practice it ends up excluding those without high incomes from the greatest upside opportunities. This is part of why "the rich get richer." Just because you have a high income doesn't mean you can and will make intelligent investment decisions. Nevertheless this is how the SEC has determined who is qualified.
Under the Securities Act of 1933, a company that offers or sells its securities must register the securities with the SEC or find an exemption from the registration requirements. The Act provides companies with a number of exemptions. For some of the exemptions, such as rules 505 and 506 of Regulation D, a company may sell its securities to what are known as "accredited investors."
The federal securities laws define the term accredited investor in Rule 501 of Regulation D as:
a bank, insurance company, registered investment company, business
development company, or small business investment company;
an employee benefit plan, within the meaning of the Employee Retirement
Income Security Act, if a bank, insurance company, or registered investment
adviser makes the investment decisions, or if the plan has total assets in
excess of $5 million;
a charitable organization, corporation, or partnership with assets exceeding
a director, executive officer, or general partner of the company selling the
a business in which all the equity owners are accredited investors;
a natural person who has individual net worth, or joint net worth with the
person’s spouse, that exceeds $1 million at the time of the purchase, excluding
the value of the primary residence of such person;
a natural person with income exceeding $200,000 in each of the two most
recent years or joint income with a spouse exceeding $300,000 for those years
and a reasonable expectation of the same income level in the current year; or
a trust with assets in excess of $5 million, not formed to acquire the
securities offered, whose purchases a sophisticated person makes.