Subject: File No. S7-09-13
From: Bruce Dobb
Affiliation: Concerned Capital - A Social Benefit Corp.

February 2, 2014

Comments Attached
Bruce Dobb, CEO
Concerned Capital - A Social Benefit Corp.
830 Traction Ave. Suite # 3A
Los Angeles, CA 90013
www.concernedcapital.org
(323) 855 9445

January 31, 2014

Elizabeth M. Murphy
Secretary
U.S. Securities and Exchange Commission
100 F. Street NE
Washington, DC 20549

RE: Release No. 33-9497, File No. S7 11 -13 Regulation A and Exemptions Under Section 3(b) of the Securities Act of 1933
Dear Ms .Murphy:
These proposed regulations and the legislation from which they spring, Section 401 of the Jumpstart Our Business Startups Act (JOBS Act) are a bold step forward in the democratization of capital for American small business and much appreciated and welcomed in that spirit. Not since the implementation of the Small Business Act (SBA) of 1953 has this Country moved as far or as fast in insuring that the credit needs of this nations largest source of job creation are met. If implemented correctly, the November 5th proposed rules will open the flow of capital to a job intensive segment of our economy that has been denied its fair share for too long privately held small business.

Our firm, Concerned Capital, helps closely held, entrepreneurial-driven companies located in economically distressed communities, incorporate social responsibility as part of their mission. By undertaking economic, environmental, and socially responsible activities, these privately owned companies can achieve sustainability and bottom-line results while contributing to broader community development goals. We help our clients access federal, state, and local economic development incentives such as tax credits, affordable financing, customized job training, and redevelopment to increase profitability. At the same time, we create a program for each corporate client that includes economic, environmental and/or social goals.

We help the very companies these proposed regulations were formulated to serve those companies with capital needs of under $ 1 million in equity. These companies also have debt needs often in excess of $ 1 million and its with a great deal of interest that we noted your request for comments on page 66458 of the proposed rules. Therein you asked, Should we create a separate exemption for certain types of offerings of limited types of securities, as one commenter proposed? To which, we respond with a resounding YES.

NEED FOR DEBT OFFERINGS AS WELL AS EQUITY

The proposed rules do not limit the types of securities that may be offered in reliance on Section 4(a)(6). Debt as well as equity securities may be offered and sold in crowdfunding transactions, as well they should be. We believe this is essential and we also feel that these debt offering can and should exceed the $ 1 million cap placed on equity offering by the Jobs Act. Under the authority sited in footnote 303 on page 66458 of your November 5th proposed rules, an exemption to issue up to $ 5 million of debt securities exists and we believe this exemption should be incorporated into the proposed rules so that JOBS Act intermediaries can expand their services to credit worthy small businesses.

Most small businesses use debt and not equity to expand. The reasons are many and varied starting with the fact that never before now have they had access to sizable amounts of equity other than that available from friends, family members or immediate business associates. Another and perhaps larger reason is that privately owned and controlled companies are not comfortable sharing ownership in assets that are the product of hours of sweat equity, hard work and diligence. The goodwill of a small businesses in the form of vendor credit, public recognition and reputation are not valued by equity investors but are very dear to a small business owner. Owners would generally rather offer a set rate of return and specific term for repayment to an investor than a share of profits, because the upside offered by profits is what motivates the entrepreneur to create a business.

Small business debt (outside of that which is obtainable with an SBA guarantee or through other forms of government sponsorship) is not widely available in todays commercial banking system. There is a need for an alternative, conventional market place. Crowdfunding offers a viable alternative to attract that capital provided that safety and soundness issues are adhered to and strict underwriting standards are developed. Hence the requirements applicable to intermediaries must incorporate parameters for debt as well as equity offerings.

DEFINITION OF INTERMEDIARIES SHOULD BE BROADENED

We suggest that the SEC specifically broaden its definition of eligible intermediaries to encourage portals sponsored by and/or affiliated with US Treasury recognized Community Development Financial Institutions. There are more than 500 community development financial institutions (CDFIs) in the United States, with at least one in every state. The primary mission of CDFIs is to promote economic development in struggling areas, both urban and rural, that are underserved by traditional financial institutions. CDFIs provide an array of financial services in their target areas including commercial loans to small and microenterprise businesses, and financial services needed for businesses in the target areas. CDFIs should be allowed to publicly raise capital for the purposes outlined in the JOBS Act through affiliated portals. CDFI sponsored portals would require a special exemption to the prohibitions against having a financial interest in issuers of crowdfunding offerings found in Section 4A(a)(11). All other applicable rules concerning FINRA membership and SEC oversight should apply to these entities and their specific activities under the Act.

The existing SEC registered broker-dealers are rarely involved in equity transaction under $ 1 million, CDFI frequently are. Most broker/dealers are not widely familiar with the kinds of cash flow considerations that small business lenders routinely adjust for. Their ability to create funding portals would be severely hampered by lack of expertise in small business finance. A series 7 exam is not geared to knowledge of small business investments and/or an understanding of the cash flow cycles of an operating small business. CDFI small business investment officers are trained in both.

Another advantage is that CDFIs have developed a pipeline of ready deals that await funding and can rapidly deploy investors money in qualified applicants awaiting funding. The demand for CDFI funding has been well documented by the US Treasury Department and each year the short-fall in tax credits allocated to and through these entities grows exponentially.

We're please to have this opportunity to respond to these SEC Crowdfunding Jobs Act proposed rules and hope that our perspective adds to the considerable expertise already demonstrated by those who have filed their comments. We also hope our recommendations are incorporated into the final rules.

Sincerely yours,

Bruce Dobb
CEO
Concerned Capital