Russ Hooper, a young econ major who was one of my best research assistants, wrote me the following, with permission to quote:

Impossible Foods makes Impossible Burgers, which are vegan burgers that look, taste, and feel like beef burgers. I’m a huge fan of beef burgers, and yet I prefer these. I’m not alone: they’ve been such a hit that Impossible Foods is struggling to meet demand.

I would love to invest in Impossible Foods. I like the product, the potential is huge, and it’s established enough that the risk isn’t enormous. But I can’t, since Impossible isn’t public and I’m not a super-rich investor or venture capital firm. They recently raised another $300M from VCs and celebrities like Jay-Z, Serena Williams, and Katy Perry. I’m not on this list since the SEC won’t allow it.

Isn’t that so frustrating? The SEC is trying to protect me from what I genuinely believe is a good investment. Impossible Foods wants the cash, I want the equity (and to support them), but it’s illegal. However, the SEC thinks it’s ok for people who are already wealthy to invest in the company (and likely get even wealthier in the process). We should all be able to.

Here’s a recent report on Impossible Foods.

I agree with Russ. What he’s referring to is the SEC’s rule on what an “accredited investor” is. This restriction has upset me for a long time, even after I became an accredited investor. For an individual to be an accredited investor and, therefore, legally allowed to invest in entities like Impossible Foods, he/she must have a net worth of $1M or more, not including equity in a home.

I remember my disappointment when Chris Cox, formerly a Republican Congressman from southern California and then the chairman of the SEC, noodled the idea of raising the limits so that an accredited investor had to have a net worth of $2M. Why? Probably something to do with inflation, which had eroded the real value of $1M. But that’s not a good enough reason.

It’s clearly a case of the SEC trying to protect us from ourselves. Yet there are no such rules for betting in Las Vegas. Someone with a $10,000 net worth can go and bet it all on “investments” that are just as risky as, and often riskier than, an investment in Impossible Foods.

The SEC is an elitist organization that enforces privilege.