Jun. 15, 2022
Vanessa Countryman, Secretary Securities and Exchange Commission 100 F Street, NE Washington, DC 20549-0609 Dear Ms. Countryman Thankyou for the opportunity to comment on the proposed unregistered finder regulation. I believe that this is a long-needed option for small entrepreneurs. I am a serial entrepreneur, the president of MAGE NRG LLC and am currently seeking outside funding. I funded earlier companies, including the precursor company to MAGE NRG, Aniki Oil LLC, mostly through friends and family. I am also involved in startup tech companies. I have tried the venture capital route without success. One study of VC funding indicated that almost 1/2 of all venture capital funding went to graduates from Harvard and Stanford universities. This is not what I would call an open market. I have also tried the angel group route, without much success. Angel groups tend to mostly invest only in their own geographic areas. I am in an area of the country with very little angel investment activity, so I have gained no traction locally. Most groups also target only certain sectors of industry, which leaves my company and many others out of consideration, most of the time. A finders regulation, I believe, would considerably help good, early stage companies raise capital and be more successful. I have also been approached by at least six scammers during my entrepreneurial career. One of them was a FINRA-licensed broker dealer, verified by FINRA, and was perpetrating a clear fraud in purporting to raise investment funds. So registration with FINRA is not a deterrent to fraud. Most early stage companies spend far too much of their time trying to raise capital instead of building their companies. As a small startup enterprise, I find that we don't have the money to hire a legal firm to complete a PPM and a Reg D filing. And then, we would need to find a broker-dealer to market the deal to potential investors. We are only raising $3M, which is of no interest to most established broker-dealers. Consequently, this financing route is not available to early-stage enterprises like my own, because of lack of funding. It is a vicious circle of underfunding for America's entrepreneurs. The struggle to access capital is strangling American entrepreneurialism. I believe that most businesses fail, not because of bad products, services, personnel, plans or management, but because of the lack of access to capital. This proposed regulation will provide a much needed new route to accessing capital by small enterprises. It may provide more risk than registered broker-dealers, but the startup community and, I believe, those who invest in early stage companies, are generally willing to accept increased risk. In sticking with only accredited investors, I believe that this regulation would be protective of investors. I would propose instituting this new regulation with a cap on the amount that can be raised by such finders of $5 M to 10M. Best Regards, Patrick Sullivan, President