Subject: File No. S7-18-09
From: Harry Gruner
Affiliation: JMI, Inc.

September 30, 2009

Elizabeth M. Murphy, Secretary
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-1090

Re: File Number S7-18-09:Political Contributions by Certain Investment Advisers
Dear Ms. Murphy:

On behalf of JMI Equity Fund, please accept this comment letter with regard to the "pay to play" rule proposals set forth by the SEC. We believe the outright ban on the use of placement agents by venture capital firms seeking public pension fund investors is unwise public policy and will serve to stymie valuable capital formation at a time when our  economy desperately requires it.

JMI  invests in the equity securities of private growth businesses. We had been in business for 13 years, investing on behalf of private individuals, when a number of years ago,  we retained CP Eaton, an experienced placement agent to help us broaden our investor base.  At the time,  we were not familiar with the institutions that had alternative investment allocations, such as public pension funds, endowments, foundations, and corporate ERISA plans.  The alternative investment professionals at CP Eaton provided a valuable service to our firm  not only  by  making the introductions  to such investors, but  by providing efficiency to what is a notoriously inefficient capital formation process, both for funds and for  prospective limited partners. CP Eaton  targeted our investment strategy to  match the  investment strategies of   institutional investors with the best fit.  We reduced the time to close the fund to a few months and were well prepared to meet the detailed information requests of the various funds.  Public pension funds would be at a material disadvantage  relative to other alternative investment investors (ERISA plans, endowments and foundations) in evaluating new funds if they did not have access to the full range of funds available to them. CP Eaton  are  valuable advisors and knowledgeable professionals with decades of experience in the alternative investment markets. They never discussed politicians or access to politicians in the time they worked on our behalf. 

We encourage you to drop the "pay to play" rule proposals to allow placement agents to continue to introduce funds to public pension funds.  Thank you for your consideration of these comments.

Sincerely

Harry Gruner

Harry Gruner
General Partner
JMI, Inc
Suite 272
2 Hamill Road

Baltimore, MD 21210