It’s almost like capital tends to concentrate in the absence of regulated financial markets or something...
For the HN demographic that doesn't own a house and "only" pays rent, I'd agree with you. But another portion of the HN demographic that does own a flat or property may not qualify, as the definition of an accredited investor (at least in the US[1]) is $1M+ USD of investible assets excluding their primary residence.
[1] https://en.wikipedia.org/wiki/Accredited_investor#United_Sta...
a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year
Registered securities (stocks, bonds, mutual funds, etc.) are widely available to non-wealthy people and are probably a better investment for most of them, frankly, because of the concentration of risk inherent in a small dollar portfolio of non-registered securities and the idea that registered securities will have some standardized reporting requirements and that one could rely on the market to do a certain amount of due diligence and price discovery.
Anyway, this distinction doesn't change my point: offers of such securities to unaccredited investors are not categorically "scams". This kind of critical reductionism is reckless to individual rights and liberty.
The expense comes from meeting the requirements to be registered on a large exchange like NYSE or NASDAQ (both of which are non-governmental entities). This is why small companies that have public stock are traded on "penny" exchanges.
In any case, I don't see any mom and pop shops offering their customers stock. There are only 10,000 companies with stock on the OTC market, out of 30 million in the US.
>>Yes, it does put some limits on individual freedom but I think this is one area where the trade-offs has been chosen decently well.
This is Big Brother ideology. No one in a free society should have their freedom restricted.
The practical results of this paternalism have been disastrous too, so it can't be justified on consequentialist grounds. Practically all small businesses are denied direct access to public capital markets atm.
That's probably trillions in lost economic gains and potentially a massive contributor to income inequality.
When you create gatekeepers, and prohibit anyone from transacting without their intermediation, you create a concentrated power structure that inhibits economic development and exacerbates income inequality.
The new crowdfunding rules are a tiny step in reversing this dire situation, but the real solution is to stop treating the adult population like children that need to be protected from their own bad judgment.