Subject: File No. S7-06-13
From: Jamie Flinchbaugh

July 6, 2014

Significantly raising the limits on being an accredited investor will destroy a crucial part of the startup ecosystem. I make these comments not as someone who will be excluded. I will still be able to invest under the new rules, but I will likely lose many of my partners in the process of investing.

The argument in favor of changing the rules are based on things such as cost of living increases. But this assumes everything else is static. It is not. Investor education has improved massively. Angel groups have allowed for groups to invest, leveraging shared knowledge, and even professional support structures. Many of your other new laws and rules are designed to increase access and participation in such investing.

But this one change could single-handedly destroy it. It isn't even just the dollars that are lost. Those with higher net worths will generally invest higher dollars. But losing participation will destroy the liveliness of the market for angel investing, which is what brings good companies into the market.