Democratic Senator Christopher Dodd wants to impose some changes on the way that financing for new ventures works in America:
First, Dodd’s bill would require startups raising funding to register with the Securities and Exchange Commission, and then wait 120 days for the SEC to review their filing. A second provision raises the wealth requirements for an “accredited investor” who can invest in startups — if the bill passes, investors would need assets of more than $2.3 million (up from $1 million) or income of more than $450,000 (up from $250,000). The third restriction removes the federal pre-emption allowing angel and venture financing in the United States to follow federal regulations, rather than face different rules between states.
Here’s Keith Rabois, an early PayPal employee who is now a VP of Slide and an angel investor:
Anyone still need more evidence that Obama and the Democrats intend to destroy Silicon Valley and the dreams of entrepreneurs?
Note that while government seeks to protect individuals without a certain level of assets & income from participating in the economically-essential and often profitable activity of venture investing (even though some of these individuals may be highly sophisticated in their understanding of finance and of the relevant markets), it also seeks, via elaborate advertising campaigns, to lure people of all income levels–in practice, especially the poor–to “invest” their money in state lotteries.
Disclosure: I have investments in venture capital.