- - - > see first: Patent Wars (IBM)

After a new technology is designed and documented,

the next step is an infusion of capital and specialized talent

to handle the investment, marketing, engineering and product development functions

involved with the commercialization phase.

Toward this end I need to convert a portion of the intellectual property into working capital.

(for each project in the "Research Project List"  and  "Development project List")

Government's Position

The stock market crashed in 1929, and the "Great Depression" followed.

After many hearings and much finger-pointing,

the government concluded that the crash was due in part

to the working and middle class who too often invested with their emotions

and lacked the knowledge and judgement skills

that more sophisticated investors possessed.

The "sophisticated investor",

who through their success and wealth had proven their better judgement

thus had proven themselves to be able to better handle the risks involved.

It was decided to exclude the working and middle classes from "Private Offerings";

those investment offerings made prior to a government sanctioned Public Offering.

In 1933 the axe fell. Since then, government over-regulation has created roadblocks

limiting access to capital by preventing the "average investor" from participating

in the private investment phase of a company's development.

The rule is called "Regulation-D" .... See:  Regulation-D

see also: Forbes Magazine

                "Digital Rules"

                January 10, 2000 page 47

                by Rick Karlgaard

                publisher@forbes.com

                www.forbes.com/karlgaard

Forbes Article on Regulation Problems .... See: Article

The SEC (Securities & Exchange Commission) defends its position

by telling us that they are striving to "protect widows and orphans from Snidely Whiplash",

by locking out the working and middle class,

presuming them unsophisticated and in need of special protection.

This unfortunately locks out most people and creates a "restricted, members only game

for the few players successful and wealthy enough to play"

in which people are "branded unequal under law" .... in spite of the 14th amendment.

This “politics of protectionism”

HELPS ONLY THOSE WHO BENEFIT FROM THE EXCLUSION OF OTHERS.

It keeps new and smaller companies out of public trading

unless and until being supported by the "sophisticated investors" and sanctioned by the government.

A small start-up company, in order to attract funding, must either ....

                •  Call on the support of a wealthy investor (often called an "angel").

                •  Place themselves in the hands of a venture capital firm.

                •  Sell themselves to a "Holding Company"

Either choice generally involves the sacrificing of ownership and control.

Holding Company

in theory

A company controlling enough interest in another company

to influence management and operations or electing its Board of Directors.

Often called a parent company.

in practice

A company with an existing profit record to act as a "Shell Company"

so an IPO can be approved by the SEC.

"Sophisticated" Investor's Position

The position of the "Sophisticated Investor" is to protect the status quo

out of fear that investment opportunities might be diluted

if the private market was open to everyone.

My Position

The high-income and net-worth restrictions are exclusionary.

The current SEC rules are "unequal under law"

and shuts out the kinds of folks who have supported my work

and enabled our success for these last 22 years.

It is no longer the world of 1933.

Today, information flows free and plentiful.

With the birth of the internet, information is available to almost anyone.

Worries of people not having enough access to the knowledge and judgement

needed to make unemotional, thoughtful decisions are much reduced.

The need to protect the bulk of the population from risky private investment offers

is therefore no longer the concern it once needed to be.

Conclusion

What is Political-Democracy without Economic-Democracy?

Is Economic Liberty as much a right as speech and religion?

I believe that "equal under law" is the foundation of any Democracy

if there is to be Liberty and Justice for ALL.

When the general public has direct access to a pre-IPO investment

they can get in on the ground floor at bargain basement prices

rather than wait to buy at investment retail.

It brings in the bulk of the population of investors that the rules now leaves out in the cold.

Capital diversity and flexibility will increase for both the company and the public.

Our Solution .... See: "Fractional Fund"