4 ms·
>what you're referring to is the quality of deal flow of an existing investment firm. There is no shortage of investors already actively involved in funding sta
by jmj42 13y ago
>what you're referring to is the quality of deal flow of an existing investment firm. There is no shortage of investors already actively involved in funding startups who wish they could have invested in a particular company.
Had they know about it. Yes, that's exactly what we're talking about. Sure there's a difference between a startup that is already working the angel and VC networks and a group of guys who want to buy a bar as a hobby, but there isn't much difference between the bar and a bakery who want to expand, or an established bar who wants to open a new location, or the two guys who want to turn recycled junk into interesting furniture. None of these are looking for large investments, and none have access to VC and angel networks. Though the risk is high, there may be investor who are willing to take the gamble.
Lifting the ban provides a channel, where one doesn't currently exist, for these organizations to reach potential investors. Likewise, it provides a channel for interested investors to find out about opportunities they would otherwise not know about.
I didn't imply that lifting the ban would make funding automatic. Nor, do I expect, does anyone actually believe that it would (though you seem to think that's what people are saying). What it does do is allow the two ends to connect when there's mutual interest.
What this does is open a channel of communication. It's a way for small businesses to reach investors. That doesn't imply that the small business is going to get funding (or even a conversation with an investor) any more that getting on Shark Tank implies that Mark Cuban is going to invest in your fancy new shoelace company. On the other hand, there may be an investor out there, somewhere, who just happens to have an aglet company in his portfolio that would make your shoelaces a billion dollar company.
- 7Figures2Commas 13y agoYou do realize that the lifting of the ban on general solicitation does not mean that startups and small businesses will simply be able to advertise at their leisure, right? These are still Reg D offerings, which require paperwork, and under the new rules, companies that are going to be advertising publicly will need to file their Form D with the SEC 15 days before the offering. Interested investors will also need to be vetted to ensure that they're qualified to participate. You don't put together a Reg D offering without competent legal counsel, and competent legal counsel costs money. So before you and your buddies can even test the fundraising waters through general solicitation, you'll have to make an investment of your own and that could easily run into the five figures.