Retail investors aren't, even traditionally, excluded from investing in startups. It's just that startups are required to make certain SEC disclosures prior to

Retail investors aren't, even traditionally, excluded from investing in startups. It's just that startups are required to make certain SEC disclosures prior to taking investment from the general public, so that the public can have information about what it's actually investing in. There are exemptions for startups that only seek money from institutional and wealthy investors, on the theory that such investors can hire their own attorneys and accountants to do an SEC-like job. So, the theory goes, they don't need the SEC vetting the transparency of the offering, because they will pay for a similar vetting process themselves. This changes the rules so retail investors can invest blindly in stocks, i.e. without being first informed about the nature of the investment opportunity through the SEC disclosures. It seems pretty reasonable to me that if someone wants to raise money, they should be required to disclose, to the potential investor, enough information about the financial position of the company and the nature of the investment for the investor to make an informed decision. If you want it leveled between institutional and retail investors, I'd prefer leveling in the direction of more transparency for both classes of investors, rather than less. If the issue is just that the SEC process is too bureaucratic, then propose a reform to streamline it, rather than bypassing disclosures entirely. One thing that makes it particularly needed is that a possible alternative, dealing with misleading fundraising through after-the-fact lawsuits, is mostly ineffective, since successful suits end up as judgments against bankrupt companies, who won't pay them. If a company gets a bunch of investors while not being entirely truthful with them about its financial position/revenues/etc., suing them after it collapses doesn't help you at that point. That's the situation we had before the SEC was created, and was the motivation for the 1933 Securities Act requiring companies to register an offering and make certain disclosures, prior to selling securities to the public.