Subject: File No. S7-06-13
From: Josh Maher
Affiliation: Manager, Seattle Angel Conference Fund

August 16, 2013

It is nice to see progress being made on these rules and I am glad that the SEC is willing to take a stab at the rules and open them for comments to see what has been overlooked or what information was missing in the rule making process. Below I have outlined three key areas of the proposed rules that are overly burdensome for early stage companies. Presumably the intent of the rules is to create more early stage companies (where the highest amount of job creation is done) and not to create more hedge funds.

These are the largest issues I personally have with the proposal:

1.The act of general solicitation is not clear and well differentiated from a discussion of the business and/or product. This leaves companies and funds in a difficult position when deciphering if and when they would be in violation of the rules. Is a pitch at a demo event general solicitation if the startup is known to be fund raising? Similarly is a hedge fund manager soliciting if they talk about an investment idea?

2.The penalties for being in violation of the rules are incredibly steep considering the difficulty in discerning where the line in the sand is for being in violation of them. Accidentally violating the rules could result in being barred from raising funds for at least 1yr. This makes sense for hedge funds or other deep pocketed fund raisers, but startups who are raising funds will likely die within that one year time frame.

3.The ongoing filing of any content related to general solicitation and the ongoing filing during the fund raising process is burdensome and puts an early stage company at a disadvantage due to the cost of managing the filings and due to the disclosure of a fund raising process that may or may not have closed. Again, this may be easily affordable by hedge funds who are raising millions - but for an early stage company raising $100-500k this is overly burdensome and destructive to the fund raising process.