This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Government Is Reserving the Best Investments for the Rich

A 2011 report by IHS Global Insight and the National Venture Capital Association found that companies, which at one point were venture-backed, were responsible for 11% of total private sector employment and 10% of total U.S. sales in 2010.

Many of the country's most successful tech companies have been venture-funded, including Google (GOOG), Facebook (FB) and Twitter (TWTR). Opening up private equity, venture capital, and other alternative investments, to sophisticated investors who have been excluded solely on the basis of their net worth or income provides those investors with attractive new opportunities and encourages increased business formation and growth.

Although I share the Securities and Exchange Commission's concern with protecting investors from unsuitable investment products, I believe this objective can still be satisfied while providing a mechanism for sophisticated investors who don't qualify under the current income and net worth tests to qualify as accredited investors.

Democratizing access to private investment opportunities would benefit investors by providing them with a wider range of opportunities. It would also aid company executives, who would see more competition for investments in their companies, and investment managers, who could solicit a wider pool of investors. In addition, it would promote new business formation and growth.

I encourage readers to submit their comments to the SEC and contact their representatives and senators about the unfairness, and unintended consequences, of the current accredited investor rule. Under a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC is scheduled to review the accredited investor standard in 2014. 

It is my hope that the commission relaxes the standard to expand access to private placements to sophisticated investors who do not current qualify. I wouldn't bet on it, however!

At the time of publication, the author owned shares of Google.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.24 0.00%
FB $117.81 0.00%
GOOG $701.43 0.00%
TSLA $211.53 0.00%
YHOO $36.94 0.00%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs