Subject: File No. S7-09-13
From: robert c guinto, Jr.
Affiliation: President, Non Profit Capital Management, LLC

October 24, 2013

Based on the 585 pages that the SEC took to write how a start-up can raise $1,000,000. What the SEC has written is a document that increases costs to start-ups, that goes against the intention of Congress.

There is nothing in the document by the SEC that allows a person starting a business and has a business plan to solicit funds and let potential investors make their decisions about its validity. The thousands of dollars being asked to incur as a start-up is the difference between having the cash to pay ones bills and spending lots of money and prayer some one likes your idea. The SEC has designed a track that will create more failures because it is asking individuals to investment their own capital that should be used on the business and not raising capital. The success of a number of companies has been about sufficient cash just at the most critical time.

Based on the rules the SEC is outlining a large number of business would be eligible for loans from their community banks because they would show to have existed most likely for a number of years or have the personal worth to seek the loan themselves and not need investors. The SEC has written a document to allow firms to act as Portals to not be sued. The document reads over and over about protecting the SEC and financial entities whom want to be Portals.

I have helped many small businesses get started and after having read the 585 pages I went back to the bill passed by Congress and said what a waste of time for the thousands of businesses this could have helped.

As outlined if you already have money then this is a great way to expand ones opportunity to bring lots of money into a new venture using money from individuals. For those starting out without cash or little cash, mortgaging their house, using credit cards, tapping their retirement, using their savings it fails.

These 585 pages does nothing to protect any investor and manipulation becomes easier when things are complex or one can give a false impression that there is a layer of review.

Review and electronic enforcement is the best way to lower the risk that investors will be manipulated. I point to the Madoff case as a failure to us data. This firm stated over and over it had made certain transactions in the market place and yet the market place did not record said volume. Thousands of individuals trusted that information was true, when in fact their financial representative did not hold Madoff to the financial accountability being asked in Crowd Funding.

When it comes to obtaining an Audit or even a Review the minimum is $5,000. However, when you read the opinions there are all the legal language of what the Auditor cannot represents. However, the fact that there are many examples of audits not being true reflections of their financials with Enron being the best example of manipulation I ask what value does it add.

Further, tax returns unless noted with a stamp from the IRS and as a PDF from the IRS there is no true way to know if the posted document is a true reflect of the return.

Each investor has their own level of Trust required to decide whether to invest. Each Investor has specific ground rules they like to use in investing. Each document the SEC is requiring may or may not help to facilitate a level of Trust on whether they will proceed or not.

When speaking to individuals who have thought about placing $10,000 or $25,000 in a start-up or one that wants to expand it comes down to the same statement. Where can I find out about what start-up opportunity is out there?

Start-ups and those seeking to expand want a simple process to raise money. They are willing to explain who they are, what they want to produce, provide their business plan, show either their personal finances or business finances or both and state what they plan to do with the money and what rights the investor gets with the investment.

Building Trust is first and foremost in bringing together investors and the first employees to accomplish a venture.

If the SEC really wants to make the biggest impact create your own Portal. Create the punch list of what you need to receive and when it is all complete the solicitation can go live on the web site. This way you have 100% compliance and less mistakes as businesses try to comply. This results in ways to track outcomes that statistically will be significant. The SEC will know what is working and what is not. Having the annual tax returns posted once filed with the IRS is a good measure of progress.

Please go back to the definition of start-up. Where in the process must a company be in its business plan in order to be eligible for the SEC Crowd funding? The SEC document seems to be saying you need to have revenue.

Crowd Funding is no more risky than buying stock with advice or without. We are all adults and make decisions all the time that either cause us to lose or gain financially.

Congress passed good legislation. The SEC needs to make access to investment opportunity equal to all investors.