An unsophisticated investor can deduce that the risk profile of Coke is much different than that of a company with a penny stock trading at $0.05. Likewise, the majority of &quot;unsophisticated&quot; investors can probably deduce the difference in risk between investing in &lt;bluechip&gt; and &lt;startup&gt;. But we can&#x27;t know for certain without conducting some kind of survey of the demographics and level of sophistication of the retail investor population.<p>As someone else pointed out - the SEC should be protecting investors&#x2F;general public from unethical and illegal acts by the businesses, not from themselves and their own lack of knowledge. If you don&#x27;t know what you&#x27;re doing, you probably shouldn&#x27;t be investing in the first place. Put your money in an ETF&#x2F;savings account and only gamble what you&#x27;re willing to lose in the equity crowdfunding market.