Subject: File No. 265-27
From: Scott Medling, Medling

March 12, 2012

I think the rules that prevent non-millionaires from investing money in small and emerging companies need to be seriously rethought. Sure, it's risky, but so is investing in anything other else. And it's certainly better than legally gambling in a casino, where in the long run (statistically) the house eventually comes out ahead. If I could invest $1 in 1000 small/emerging companies, the expected value of the investment in 10 years would probably be more than $1000. I don't have the numbers in front of me, but I expect the SEC to be doing the math if it's has a ban in place.

Kickstarter / LendingClub / Prosper are wonderful models for how to crowd-funded small/emerging without resulting in individuals taking on a large amount of risk.

Not only that, but people are free to waste their money on alcohol, cigarettes, and all sorts of other stuff that, at best, will never produce a return on their investment.

People of all economic status are capable of understanding the risks behind buying a stake in a company, and therefore should all be allowed to invest reasonable sums of money in small/emerging companies.

If the SEC feels it is necessary to put a cap on the amount invested in a single company, or a maximum in a given year, that would at least be better than the total ban currently in place.