Are you an entrepreneur looking for funding? In the new comprehensive finance reform bill that Chris Dodd is heading up, are provisions that would increase the cost, and the time to complete angel financing for new business ventures. As someone who knows first-hand how difficult (if not impossible) it is to find funding, the idea of regulating angel investors, will just make an extremely difficult situation, essentially impossible.
According to a recent Huffington Post article: “Under existing law, start-up companies can raise money easily and quickly from “accredited investors” — individuals with substantial wealth or income. There is no need for the companies or the investors to gain approval from any state or regulatory official.
All of this would change if Section 926 of the Dodd bill is included in any final reform legislation. That section would require, for the first time, companies seeking angel investment to make a filing with the Securities and Exchange Commission, which would have 120 days to review it. This would both raise the cost of seeking angels and delay the ability of companies to benefit from their funding.”
With loans, even when they’re SBA backed, non-existent, a credit crunch, and now this, how are businesses going to get started? Bootstrapping is fine for a while, but there comes a point with most new ventures when growth requires capital. How will the economy recover if no one is starting ventures? And how did a bill that is supposed to reform those “to big to fail” manage to impact those of us who are too small to lobby?
I’m getting off my soapbox now, but if you care about saving entrepreneurs, and creating jobs, let congress know.
On a lighter note, check out this week’s Blogging Boomers Carnival.