Subject: File No. DF Title IV - Accredited Investor
From: Spencer Hoffman
Affiliation: Founder of fledgling startup

November 8, 2010

I believe that the proposed regulations, while well-intended, are likely misguided and are believed to have income standards based on something (the "inflation" rate) that is out of line with reality. It's been known for quite some time that using the "basket of goods" and things like "substitution" give highly questionable results. Even "headline" inflation hides a great many things. Basing any values in these regulations on these suspect values is likely to have the opposite effect.

Trying redoing the calculations using the Austrian definition of inflation and deflation (increase/decrease in money and credit, WITHOUT considering prices) and you'll get very, very different results, which may be more reflective on the facts on the ground, especially with regards to venture capital, where availability of money and credit means a great deal more than any prices in a basket of consumer goods.

Why not simply have an accredited investor be someone that registers with the SEC and signs consent forms that basically say "Here are the risks." and make the investors respond that they "know the risks, and accept them."