What is a 708 investor and how do you qualify?
There’s a line in investing that most people never cross. Not because they can’t, but because they don’t even know it exists.
That line is section 708 of the corporations act 2001.
On one side, everyday investors limited to public deals. On the other, a smaller group with access to private capital, early-stage deals, and opportunities that never hit the mainstream.
If you’ve heard the term sophisticated investor and wondered what it actually means, this is where it all starts.
What is a 708 investor?
A 708 investor is someone who meets specific criteria under section 708 of the corporations act, allowing them to access investments that aren’t offered to the general public.
In simple terms, it means:
You’re considered financially experienced enough to invest without the protections most retail investors rely on.
Because of that, companies are allowed to offer you deals without issuing a full disclosure document or prospectus.
That’s the trade-off, less regulation, more access.
What does section 708 of the corporations act mean?
At its core, section 708 is about efficiency.
It allows companies to raise capital faster by offering securities to certain types of investors without going through the full regulatory process.
Normally, companies must provide a prospectus or detailed disclosure document before offering investments. That process is expensive, slow, and heavily regulated.
Section 708 removes that requirement, but only when dealing with investors who are considered capable of understanding the risks.
This is why it plays such a central role in capital markets and private fundraising.
708 investor vs retail investor: What’s the difference?
The difference is not just technical. It changes everything about how you invest.
A retail investor:
- Has access to public markets
- Receives full regulatory protection
- Relies on detailed disclosure
A 708 investor:
- Accesses private and off-market deals
- Operates with fewer protections
- Makes decisions with limited information
That shift opens doors, but it also demands a higher level of responsibility.
Types of 708 investors explained
Not all 708 investors are the same. The law separates them into distinct categories.
Sophisticated investors
This is the most common path.
A sophisticated investor qualifies based on financial capacity, typically proven through income or assets, and confirmed by a qualified accountant.
Professional investors
These include entities like:
- Financial institutions
- Fund managers
- AFSL holders or a financial services licensee
They are automatically considered experienced due to their role in the financial system.
Experienced investors
This category is less rigid.
It applies when a company or provider of financial services determines that an investor has sufficient experience to assess risks without standard protections.
How to qualify as a 708 sophisticated investor
This is where things become practical.
To qualify as a sophisticated investor, you must meet at least one of the following criteria and obtain a valid 708 certificate.
Income test
You earn at least:
- $250,000 per year
- For two consecutive financial years
Net assets test
You hold at least:
- $2.5 million in net assets
This can include property, shares, and other investments.
Accountant certificate requirement
This is non-negotiable.
A qualified accountant must verify that you meet either the income or asset threshold and issue a certificate confirming your status.
That certificate is typically valid for up to two years.
Without it, you cannot access most 708-only deals.
What investments can 708 investors access?
This is where the real advantage shows up.
As a 708 investor, you unlock a different layer of investment opportunities, often referred to as 708 deals, that are not available to the general public.
These include:
- ASX placements Australia
- IPO allocations before public listing
- Pre-IPO rounds
- Private credit deals
- Venture capital investments
- Off-market opportunities
These 708 deals sit closer to the source of capital. That means earlier access, stronger positioning, and in many cases, better entry pricing.
Instead of competing in crowded public markets, you’re stepping into opportunities at the capital raising stage, where companies are actively looking for investors who meet the requirements under section 708 of the
Why companies target 708 investors for capital raising
Companies don’t just prefer 708 investors. They actively seek them out.
Here’s why:
- Faster capital raising without regulatory delays
- Lower compliance costs under the corporations act 2001
- Ability to raise large amounts of equity capital quickly
- Direct access to investors who understand risk
This is a core mechanism behind how companies raise capital in modern capital markets.
Benefits of being a 708 investor
The upside is not theoretical. It’s structural.
You gain:
- Access to deals before the public
- Exposure to private markets
- Greater control over your investment strategy
- The ability to participate in capital raising events early
This is where serious investors build an edge.
Risks you need to understand before qualifying
Access comes with a cost.
When you invest as a 708 investor, you often receive:
- Less detailed disclosure
- No formal disclosure document
- Limited regulatory protection
There are also practical risks:
- Illiquid investments
- Longer holding periods
- Higher chance of capital loss
This is not passive investing. It requires judgment.
Is becoming a 708 investor worth it?
It depends on how you approach investing.
This path makes sense if you:
- Actively seek higher-risk, higher-reward opportunities
- Want exposure beyond public markets
- Understand how capital flows through private deals
It may not suit you if:
- You rely heavily on structured disclosures
- You prefer low-risk, liquid investments
- You’re not comfortable evaluating deals independently
The label itself doesn’t make you a better investor. What you do with it does.
How to get started as a 708 investor
If you’re considering this path, the process is straightforward:
- Review your income or asset position
- Contact a qualified accountant
- Obtain your 708 certificate
- Register with platforms or brokers offering private deals
- Start reviewing opportunities carefully
Once you’re approved, you’ll begin seeing deals that were previously out of reach.