[sparky]

Yeah, I think that comment conflates three things: 1) The regulatory burden of going public (Sarbanes-Oxley compliance et al.) pushes companies to stay private, which keeps the average Jane from investing in those companies via the public markets.

2) For those companies that are privately held (whether that's because of the regulations in #1 or for more fundamental reasons), separate regulations (accredited investor rules et al.) prevent the average Joe from investing privately.

3) On top of #1 and #2, market forces and norms give more investment opportunities (both public and private) to large, established players than individual laymen. For example:

* Companies may prefer to take $1M each from 5 large investors than $1k each from 5000 people, both to reduce logistical burden and because those large investors statistically have other unique things to offer like expertise, advice, and connections. This is unfortunate for the small-time-but-sophisticated investor, but seems quite rational.

* IPO shares only being offered to large friends and clients of the underwriter. The justification is reduced logistical overhead as in the previous case, but the true motivation is widely suspected to be cronyism.