It&#x27;s certainly more dangerous than investing in IBM or Chipotle, but not obviously more dangerous than a number of things which we let adults purchase, including casino chips, time share properties, houses in California (which we&#x27;ll subsidize your 5X leverage on), art history degrees (where capping it at 5X leverage would be refreshingly conservative), etc etc.<p>A $3,000 computer purchased today will depreciate to zero in 3~4 years, leaving you with hopefully some happy memories and a paperweight.  Three $1k crowdfunding investments may do likewise.  Do we distinguish them because they don&#x27;t guarantee the paperweight?<p>I get the social purpose of e.g. preventing boiler room operations from extracting &quot;investments&quot; by retirees into businesses which are not actual businesses, but for businesses which <i>are</i> actual businesses which just happen to have 90% failure rates, &quot;Distribute the risk among a group of people guaranteed to be at least middle class; and cap it at a figure lower than what they could reasonably spend on e.g. a wedding dress&quot; seems to capture most of the social benefits of outlawing outright scams while also not outlawing middle class people from owning startup shares other than those they receive as compensation for services rendered.