The current capital market structure, with its high fees, delays, and limited access, is a direct result of regulations from the 1930s. These laws created layers of intermediaries to enforce trust, baking in complexity and rent-seeking by design. This historical context explains why the system is ripe for disruption by more efficient technologies.

Senator Warren argues that just as food safety laws allow consumers to trust products without personal testing, financial regulations should protect investors from hidden scams. This "cop on the beat" creates the confidence necessary for true democratization of investing, rather than stifling markets.

Despite the allure of direct-to-consumer models after the JOBS Act, the only viable path to retail capital in private markets is through financial advisors at wirehouses and broker-dealers. This channel requires products with liquidity and specific registrations, a fundamentally different approach than institutional fundraising.

High-frequency trading (HFT) firms use proprietary exchange data feeds to legally front-run retail and institutional orders. This systemic disadvantage erodes investor confidence, pushing them toward high-risk YOLO call options and sports betting to seek returns.

The INVEST Act mandates a free test allowing non-accredited investors (95% of the US) to participate in venture capital. This shifts the barrier to entry from personal wealth to demonstrated financial knowledge, potentially unlocking a massive new pool of capital for startups from everyday professionals.

The financial industry systematically funnels average investors into index funds not just for efficiency, but from a belief that 'mom and pop savers are considered too stupid to handle their own money.' This creates a system where the wealthy receive personalized stock advice and white-glove treatment, while smaller investors get a generic, low-effort solution that limits their potential wealth.

Wood calls current accredited investor laws, which restrict private market access based on wealth, "un-American." She argues it's illogical when anyone can buy lottery tickets. Her proposed solution is a simple knowledge-based test on diversification and asset classes to democratize access to venture-style investments for retail investors.

Increased retail access to alternatives helps level the playing field between individual and institutional investors. However, capturing this opportunity favors large, scaled managers like Blackstone and Apollo who can afford brand marketing and distribution. This dynamic accelerates industry consolidation, widening the gap between mega-firms and smaller managers.

The venture capital paradigm has inverted. Historically, private companies traded at an "illiquidity discount" to their public counterparts. Now, for elite companies, there is an "access premium" where investors pay more for private shares due to scarcity and hype. This makes staying private longer more attractive.