1/ Unpopular opinion: there are two separate issues that get conflated when talking about access to private markets: sophistication and market power.

Do many who are not “accredited investors” have equal if not greater investment sophistication compared to those who are? Yes. https://twitter.com/pridesai/status/1338881172315787272

2/ However, do these sophisticated smaller investors have the market power to ensure access to all material information about these private issuers? Generally, no.

3/ Too many private securities are sold on a “take it or leave it“ basis, with little or no opportunity for investor investigation and due diligence.

In my experience, the quality of the disclosure provided “voluntarily“ by many private insurers is woefully lacking.

4/ In theory, at least, the ability of larger investors to write larger checks (especially when in comes to smaller private deals) puts them in a position to demand information and access that just doesn’t make sense for even a very sophisticated small private investor.

5/ I I am all for broadening the group of investors who can invest in private companies, but this cannot be at the cost of companies providing inadequate information to prospective investors.

6/ How to address this conundrum?

Marketplaces and ATSs need to step up and up the game in terms of requiring and policing small company disclosure.

7/ I would like to see more competition in the quality of listing standards for private markets.

This would be a great step forward in facilitating access for sophisticated smaller investors who cannot demand detailed issuer information, but can evaluate it, if provided.

[End]