April 23, 2010

Dodd #FinReg bill will cripple Angel Investing

So sayeth Angel Investor (and former Congressional candidate) Steve Welch [emphasis added]:

In its current state, Senator Chris Dodd’s legislation would make two sweeping changes to the way in which angel investors and entrepreneurs can operate. First, the bill would redefine who would be qualified to be an angel investor. Currently, individuals with either $1 million in investable assets or $250,000 in income qualify as accredited investors. The new bill would change this to individuals with $2.3 million in assets or $450,000 in income. According to the Kauffman Foundation, this would eliminate 77 percent of accredited investors. This would single-handedly reduce the amount of capital available to early stage businesses and stunt our much needed job creation.

In addition, the bill would require any company attempting to raise angel investment to seek SEC approval, which would take up to 4 months. As an active angel investor myself, I can say with certainty that companies in this stage can rarely wait four months for funding. They will simply be forced to close up shop.
Please go read the whole thing.

Posted by: JoeCollins at 06:46 PM | Comments (3) | Add Comment
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