Interesting debate regarding the whether Sen. Dodd's bill is actually protection for entrepreneurs or really just a way to keep angel investors out of the game in order to make room for others. According to some reports this legislation could decrease the number of accredited Angels by up to 2/3 by increasing the red tape associated with seeking angel funding.
The Entrepreneurs Movement sent out an interesting opinion piece in the Huffington Post. Robert Litan, the VP of Research and Policy at the Kauffman Foundation noted "This would require 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 angles and delay the ability of companies to benefit from their funding...it is the very worst possible time to discourage angel investment." He questions why this is being added to a financial reform bill, in which, "there is no evidence that angel investment in startup companies played any role in the financial crisis." The opinion piece can be read at http://huff.to/bZzXVw.
Read the "Restoring American Financial Stability Act of 2010" at at http://bit.ly/caY7bc - the most notable sections are on pages 380-81 (Section 412-413) and 816-819 (Section 926).
I've heard some pretty interesting theories on why this will not be good and why it seems fishy to include it in such a bill at such a time.
What's your opinion?
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