[themagician]

We don't protect investors from penny stocks, which are far riskier. We "protect" investors from damn near nothing. There are some limits on day trading and options trading sure, but those start to get lifted at around $25k.

Investing in a private company that's about to go IPO is actually not that risky when compared to multitude of other investment instruments that are available.

The secondary market is private market for the 1%. That's literally what it is. Maybe that's not how it started or how it was originally sold, but that's what it is. And it's now institutionalized and part of the law.

The idea that it's about protection is just absurd. It's absurd. Are you telling me you are glad that the 1% is out there making sure that you can't invest in Facebook for $20/share? Protection? Really?

[oh_sigh]

Right...I wonder how the public would react to those "protections" if they were dropped a bit, but still out of reach for the average person. Let's say $100k in assets, not including your home and property. Now, about 15% of Americans have access to this pool. Do you think the other 85% is going to be happy about this? Right now, the way the regulations are set up, it seems like such a small minority of people have access, that it isn't worth worrying about. But $1M is really just an arbitrary number.

[angersock]

Your argument here seems somewhat reinforce the "private club" theory.

[oh_sigh]

Well, good, because that is what I was going for :) I think most people don't care about the arbitrary wealth limit on these investments because they either 1) don't know it exists, or 2) know it exists, but $1M is such a far off magical number that it's easy to think almost nobody has access to it. If the number was lower, but still high, I think people would see it for what it really is, and be upset that they are prevented by the government from using their money as they see fit, especially as it is the same government which runs the lottery and allows casinos to operate.