Subject: Accredited Investor Definition
From: Philip Todd Cochetti

Jan. 11, 2020



Dear SEC, 
 
Please consider a status of “accredited investor” for those who are alumni of a University with a VC-fund for projects originated at the University. 
 
I am a University of Pennsylvania alumnus. Recently, “Chestnut Street Ventures” was founded as an investment fund which researches and helps to capitalize projects which were initiated at our university. This is a growing trend and it appears that Chestnut Street is part of a community of such funds by Alumni Ventures Group. It includes Brown, Columbia, Cornell, Dartmouth, Duke, Harvard, MIT, etc…  They do the background research and due diligence and although as with any investment there is risk, they do their best to minimize these risks. 
 
Further, in my research into this matter, VC as an investment option is in general and on average has a higher expected return than traditional stock market investing. Yes, I understand this statement is qualified in big quotes with “in general” and “on average”. As a data scientist and with a background in biostatistics and working professionally and publishing in medical research and statistics, I understand what those terms mean and the limitations of them. I also understand that in the long run, if something is true in general and on average, it tends to follow that pattern. In the long run, if one can expect on traditional 401(k) investments to grow and mature over one’s professional career. And if on average and in the long run, venture investments tend to outperform the traditional market…  That long run should be enough runway to outperform the market.  
 
This assertion that VC outperforms the market is replicated in many places, and notably the following publication shows returns typically 3 – 4% better in all years investigated except 2006.  (Harris, Jenkinson, Kaplan. How Do Private Equity Investments Perform Compared to Public Equity. (2016). Journal of Investment Management : JOIM.) 
 
If venture capital is a better investment than the stock market. Why is it that not only am I allowed to, I am encouraged to put my nest egg in a 403(b)/401(k) vehicle based on the stock market strategy and am not allowed to invest in VC?  This seems both counter intuitive and frankly unfair. 
 
I get the idea is minimizing the exposure of uninformed investors from potentially riskier “gamble” investments. Yet, under such a group fund managed like these alumni funds, I do not see how that applies. There isn’t a fly-by-night grift type situation happening. I’m not asking to invest in Theranos.. I am asking to support ventures by fellow Penn professors, students, colleagues and peers, and to do so through an informed agent who helps to verify to the best of their ability the legitimacy and promise of their invested projects. 
 
I would appreciate your consideration of this request. I appreciate your concern for the citizen not of great means. I am one to be frank. I also hope that I can soon direct some of my limited investment funds into companies I believe in, people whom I trust and value as colleagues and peers, and through a group that is managing many similar investments with a good track record. 
 
Thank you, 
Philip Todd Cochetti
UPenn, School of Arts & Sciences ‘06 
 
Phil Cochetti
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