Subject: File No. S7-06-13
From: John A Sechrest
Affiliation: Founder of Seattle Angel Conference

September 22, 2013

One of the intents of the JOBS Act is to make the process of creating and growing startups easier. Some portions of the new rules provide help. The reduction in overhead for doing an IPO will increase the number of companies which go public.

The 506(c) option for providing for general solicitation looks like an interesting opportunity. We would like to make it easier and simpler for startups to engage with people willing to fund their companies. HOWEVER, the requirements for verifying Angel Investor status by repeated engaging with professionals or by disclosing private financials have caused a significant stir with the members of the Seattle Angel Community. I do not expect myself, or other members of the Seattle Angel Conference community to be providing private documents to startup companies.

The process of self-disclosure and self-identification as an Angel investor was working well before. I do not know of occasions where this did not work.

Adding frictions to the funding process is a significant problem. As it currently is structured, there is a likelihood that the Angel Groups meeting for demo days, and investment forums will be curtailed as a result of this.

The Seattle Angel Conference holds a regular investment conference where we engage new Angel investors in the process of doing an Angel Investment. We hold a public conference to demonstrate the results of the due diligence process and to spread the information about how Angel Investing works.

At the moment, there is no mechanism for people to get "certified" as sophisticated investors, and to their by invest without restriction or friction.

It is vital to increase the ability of people to invest in startups. 506(c) verification rules do just the opposite. They increase the friction of the transaction and reduce the probability of an investment.

It would be helpful to have a way to run a set of classes and create a path for people to be identified as "sophisticated investors", so that we can increase the ability of startups and investors to find each other.