What the House's GameStop hearing could mean for private markets

The House Financial Services Committee tomorrow will hold its GameStop hearing, including testimony from the heads of Robinhood, Reddit, Citadel and Melvin Capital. Plus the trader known as "Roaring Kitty," who had better be wearing his headband.What we know: Conventional wisdom is that the hearing will be lots of sound and fury signifying nothing.It's the right read. Particularly since most of the proposed fixes would come from the SEC rather than from Congress (which hasn't even scheduled a confirmation hearing for President Biden's SEC chair nominee, Gary Gensler).But a more meaningful investor democratization narrative could emerge between beratings of Silicon Valley and Wall Street executives, involving private market investments.Committee members Reps. Anthony Gonzalez (R-Ohio) and Patrick McHenry (R-N.C.) kept returning to this idea last night, during a Clubhouse conversation organized by D.C. news startup Punchbowl.They complained that current accredited investor rules are what really creates a rigged market, preventing most retail investors from participating in the financial upside of hot tech startups like Robinhood and Clubhouse.Gonzalez introduced a bill last year to begin expanding access. McHenry yesterday suggested eliminating the quantitative accredited investor thresholds, replacing them with some sort of investor knowledge test (something that NYSE president Stacey Cunningham also suggested to me last week during our "Axios on HBO" interview).Between the lines: Gonzalez and McHenry are both in the minority right now. Plus, they'd need to overcome the reality that tech startups are flush with investor interest (just look at today's VC Deals section), which means structural easing of access might not achieve the desired result.The bottom line: Efforts to expand retail exposure to private markets isn't new, particularly if you consider crowdfunding. The GameStop saga, though, might have given them renewed momentum, despite not being directly related.Go deeper: Hedge funds will be the villain at GameStop hearing

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