Regulatory capture is forcing the entire economy through your cartel in the name of nominal protection.
Private share contributions give huge asymmetric upside to private investors/founders. Yes they take risk in that their shares still have to end up being worth something one day, but clearly the upside tax advantages are ridiculously unbalanced against the middle class because not everyone has access to early stage investments.
So, even the playing field by:
- Letting anyone invest in early stage companies (this has many other implications)
Or
- Only allow cash contributions to IRAs
What can be assured is that the exchange can be booked at a market value, which can never be guaranteed in a private sale in an opaque market, risking shenanigans to shift value beyond the contribution limit.
(You can say a corp’s initial shares have zero value, but we can all agree here that a Corp formed to execute on a startup team’s plan/idea absolutely does have value).