This may seem slightly redundant, in light of David Foster’s post below which inspired me to post this on my own blog, but Lexington Green strongly felt that the point could stand repeating ( or shouting from the rooftops). So, here goes:
Senator Chris Dodd (D-Connecticut) is working hard in Washington…. to make sure that only those who are already Rich and Powerful will have a shot at being rich and powerful.
From Rick Tumlinson at Huffington Post:
- Start-ups have to register with the Security Exchange Commission and then wait 4 months minimum for it to review their filing. This is a lifetime in the fast moving world of start-ups. (Keep in mind you and your employees are living hand to mouth everyday there is no money coming in.)
- Accredited investors (those who can legally invest in start-ups) would be limited to those with assets of over2.5 million (up from1 million) or a personal income of450,000 (up from250,000). This knocks mom and dad and uncle Bill right out of the game for most entrepreneurs. How many multi-millionaires in your family and close friends?
- Removing the federal pre-emption which provides a single set of national regulations and forcing companies to deal with state-by-state variations in rules. Most start-ups are kitchen table corporations at first. We have no money to pay lawyers to figure things out for us. That’s why we are looking for funds in the first place. Duh!
This is so egregiously wrongheaded and economically counterproductive on so many levels that it’s hard to know where to begin. Even the big money Obama backers of Silicon Valley are calling this bill “insane” . There’s literally no upside to these provisions which limit the field of potential start-up investors to a professional insider’s club skilled at wheedling favors from the SEC behind closed doors. That may be the objective of these rules.
You middle-class serfs can get back to the fields now. Creating start-ups and making investments are not for your kind.