What is Accredited Investor?

Legal Definition
An accredited or sophisticated investor is an investor with a special status under financial regulation laws. The definition of an accredited investor (if any), and the consequences of being classified as such, vary between countries. Generally, accredited investors include high-net-worth individuals, banks, and other large corporations, who have access to complex and higher-risk investments such as venture capital, hedge funds and angel investments.

The ostensible purpose of the status designation is to protect potential investors from risk. The assumption underlying accreditation is that individuals or organizations who qualify will have sufficient financial sophistication to understand and take on the risks associated with certain investment offerings. Laws may require that some types of financial offerings may only be made to accredited investors.
-- Wikipedia
Legal Definition
Under federal law, no securities may be sold or offered for sale unless they are registered, or there is an exception. An accredited investor is one such exemption: certain high-net-worth individividual, as defined in Rule 501 of Regulation D who may purchase certain unregistered securities.

See: http://www.sec.gov/answers/accred.htm
Legal Definition
Under the US SECURITIES AND EXCHANGE COMMISSION Regulation D, a wealthy investor with a minimum net worth of $1 million or annual income of more than $200,000 that is permitted to invest in high RISK investments that are normally intended only for sophisticated investors that can withstand large economic losses.