I am more or less in agreement with you. However, (and although IANAL) I think it worth pointing out that your "best friend from high school" investment is prob

I am more or less in agreement with you. However, (and although IANAL) I think it worth pointing out that your "best friend from high school" investment is probably fine under rule 505 of regulation D: http://www.sec.gov/answers/rule505.htm http://www.sec.gov/answers/rule505.htm The rules don't generally prohibit per se certain investments from taking place. They require companies that take such investments (e.g. from unaccredited, unsophisticated investors) or that solicit investment from the general populace (i.e. not your best friend from high school), to comply with the regulations pertaining to publicly traded companies.