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Oh, for fuck's sake. We're not hurting for a lack of angels because of the accredited investor rules. We're hurting for a lack of angels because there aren't

Oh, for fuck's sake. We're not hurting for a lack of angels because of the accredited investor rules. We're hurting for a lack of angels because there aren't a lot of people who are willing to cut checks to young companies without revenue after other people they know said no. Jacking up the minimum threshold to $2.3 million from $1 million (assuming this passes in current form, which it won't) is a complete non-event for almost every founder.

rmaccloy 17y ago
I think the minimum NW change is the most minor of the issues here (especially in SV). Imposing more of a regulatory burden isn't going to make anyone more likely to cut checks, and increasing the barrier and latency to initial funding is going to make plenty of potential entrepreneurs decline to make the leap. I think it's quite dangerous to assume such provisions aren't going to make it past whatever partisan wrangling goes on; I doubt either the dems or the GOP are going to give much of a damn about the startup ecosystem unless a lot of noise gets made about it.
- hga 17y ago
  "[...] increasing the ... latency to initial funding is going to make plenty of potential entrepreneurs decline to make the leap." That's a very good insight. Up to 120 days is a long time to develop second thoughts, have something else come up that changes things for the investor, etc. I suppose you could include a CD or DVD of porn as a bribe to overall speed up the SEC's processing of your request ^_^.
hga 17y ago
If we assume, for the moment, that your thesis is correct (and ignore the friends and family type of angels), the other regulations are arguably worse than the new threshold requirements. Which the WSJ implied by the editorial board's placement of this issue at the end of the editorial. How many startups will still be alive after they've waited as many as 120 days for the SEC to bless their fund raising effort? How many will be able to run the gauntlet of state regulators? If the Massachusetts regulator is as conservative as it was in the '80s, there will be no angel financing in that state, full stop. How bad will nanny state California be???

rmaccloy 17y ago

I think the minimum NW change is the most minor of the issues here (especially in SV). Imposing more of a regulatory burden isn't going to make anyone more likely to cut checks, and increasing the barrier and latency to initial funding is going to make plenty of potential entrepreneurs decline to make the leap. I think it's quite dangerous to assume such provisions aren't going to make it past whatever partisan wrangling goes on; I doubt either the dems or the GOP are going to give much of a damn about the startup ecosystem unless a lot of noise gets made about it.

hga 17y ago
"[...] increasing the ... latency to initial funding is going to make plenty of potential entrepreneurs decline to make the leap." That's a very good insight. Up to 120 days is a long time to develop second thoughts, have something else come up that changes things for the investor, etc. I suppose you could include a CD or DVD of porn as a bribe to overall speed up the SEC's processing of your request ^_^.

hga 17y ago

If we assume, for the moment, that your thesis is correct (and ignore the friends and family type of angels), the other regulations are arguably worse than the new threshold requirements. Which the WSJ implied by the editorial board's placement of this issue at the end of the editorial. How many startups will still be alive after they've waited as many as 120 days for the SEC to bless their fund raising effort? How many will be able to run the gauntlet of state regulators? If the Massachusetts regulator is as conservative as it was in the '80s, there will be no angel financing in that state, full stop. How bad will nanny state California be???