Subject: File No. 265-27
From: Pat LaVecchia
Affiliation: Managing Partner, LaVecchia Capital

October 26, 2011

I would like to commend SEC Chairperson Schapiro for the formation of the advisory committee. I trust the committee participants will engage in constructive debate and dialogue and I have confidence that appropriate recommendations will be made to the SEC regarding improving small business capital raising options, reinvigorating the capital markets for smaller companies in the US markets, and allowing the US capital markets to regain their competitiveness which has been stifled by regulation.

Specifically, the pendulum has swung too far and has caused the unintended consequence of throttling back the capital markets and, most particularly, impairing smaller companies ability to grow through lack of access to capital.

Since 2002, the increased reporting burden on companies has certainly made the US capital markets less competitive from a global standpoint which in turn has impacted liquidity/trading especially for smaller companies. As I recall, when Sarbanes-Oxley was enacted, it was suggested to be cost-effective for a small company with a simple business model to comply. However, that is not the case for many small public companies. In fact many smaller public companies look at the lack of liquidity/trading for their company's own stock coupled with the increased costs of regulation, and ask themselves "Why be public?" and many have opted to go private. For smaller private companies thinking about going public, the cost threshold of becoming a public company is now higher due to regulation and increased costs associated with being a publicly listed company. The statistics, over the last 10 years, are alarming in regards to the reduced number of IPOs completed as well as the reduced number of public companies trading on national exchanges. "Why be public?" was not a question typically posed by small companies in the past.

Duncan Niederauer, CEO OF NYX Euronext, made the following statement (in a wsj article in 2009) which I entirely agree with and view as an overarching theme for the committee to consider and address "We need to keep the virtuous circle healthy... the entrepreneur gets rewarded for taking personal risk, borrowing capital, taking an idea, starting a new business from scratch. That's America the last time I checked. When they get big enough, they've proved the idea works, they want to grow, they come to the equity market because it's an efficient way to raise more capital to grow and the next thing you know Microsoft starts in a recession and now employs 95,000 people around the world, 25 to 30 years later. That's America, that's what we're supposed to stand for, and if we're not careful that virtuous circle is going to go backward and it's going to be a vicious circle." With its recommendations, I hope that the committee can allow the described "virtuous circle" to thrive once again.

As the committee debates, I hope the committee's final recommendations reflect structural improvements on the current environment for small businesses so that the end result is that companies will once again have wide access to the capital markets, improved trading liquidity, etc.. I am available to discuss these comments in more detail at your convenience.


Pat LaVecchia
Managing Partner
LaVecchia Capital

Pat LaVecchia Bio
Mr. LaVecchia is the Managing Partner of LaVecchia Group LLC, a privately held merchant bank consisting of its broker dealer, LaVecchia Capital LLC, which is a member firm of FINRA and SIPC, and a private equity and hedge investment group. Mr. LaVecchia has over twenty years of senior experience on Wall Street and currently serves on the board of directors as vice chairman of InfuSystem Holdings Inc. (INFU, NYSE Amex), a healthcare services firm, and co-chairman of Premiere Opportunities Group, Inc. (PPBL, OTC). Mr. LaVecchia is currently a Council Member of the NYSE Amex Listed Company Council, an advisory group to the NYSE Euronext companies.

Mr. LaVecchia has built and run several major Wall Street groups in his career. He has extensive experience and expertise in private equity, investment banking, mergers and acquisitions, corporate advisory and capital markets including IPOs, follow-on offerings, high yield and corporate debt offerings, private capital raises (both debt and equity) and PIPE transactions. Mr. LaVecchia has been involved in transactions involving hundreds of companies and he has directly led advisory on over $15 billion of transactions in public offerings, strategic and financial private equity transactions, mergers and acquisitions and PIPE transactions on a global basis involving transactions in a multitude of industries including the technology, consumer and internet, telecommunications, media, financial services, healthcare, business services, and general industrial sectors. Mr. LaVecchia has also played the leading role in numerous mergers acquisitions, corporate debt and high yield transactions.

Mr. LaVecchia has previously served as Group Head of Global Private Corporate Equity Placements at Credit Suisse First Boston, Managing Director and Head of the Private Equity Placement Group at Bear, Stearns Company, Managing Director and Group Head of the Private Finance and Sponsors Group at Legg Mason Wood Walker, Inc., and Managing Director and Head of Capital Markets at FTN Midwest, In addition, Mr. LaVecchia was a private equity investor and Senior Managing Director at Hawk Holdings, LLC, an investment and holding company that was a joint venture involving Qwest Communications.

Mr. LaVecchia has also served as a sector member to the New York City Investment Fund and has been frequently quoted as an expert on capital raising by a number of periodicals including the Wall Street Journal, New York Times, Bloomberg News, Buyouts newsletter, Investors Dealer Digest, Private Equity Week newsletter, Private Equity Analyst newsletter, the Daily Deal, Inc. magazine, etc. Additionally, Mr. LaVecchia is a regular speaker/moderator at a number of industry, mezzanine, private equity and venture capital conferences, including Middle Market March Madness, Institute for International Research, Strategic Research Institute, Private Equity Analyst, Venture Finance, and Venture Forum.

Mr. LaVecchia received his MBA from The Wharton School of the University of Pennsylvania with a major in Finance and a concentration in Strategic Planning. He received his BA, magna cum laude, from Clark University, where he was elected to Phi Beta Kappa. Mr. LaVecchia is a Wharton Ambassador.