Killing Off Silicon Valley


Uppity Water Nymph
Feb 12, 2007
Reaction score
The Land of Funk
The Dodd bill includes a provision which could kill off start ups. The valley has never recovered from the Dot Com Bust - this bill could finish it off:

Angel investors don’t usually stay up at night worrying about Capitol Hill. But a financial reform bill proposed by Chris Dodd, the Democrat chairing the Senate Banking Committee, includes new restrictions on startups and angels.

Not surprisingly, investors aren’t happy about it, saying it’s “insane,” “frankly ridiculous,” and aims to “destroy Silicon Valley.”

There are three changes that should have a particular effect on angel investors, a catch-all category which includes everyone from friends and family members who invest in a startup, to unaffiliated wealthy individuals, to side investments made by venture capitalists acting on their own.

First, Dodd’s bill would require startups raising funding to register with the Securities and Exchange Commission, and then wait 120 days for the SEC to review their filing. A second provision raises the wealth requirements for an “accredited investor” who can invest in startups — if the bill passes, investors would need assets of more than $2.3 million (up from $1 million) or income of more than $450,000 (up from $250,000). The third restriction removes the federal pre-emption allowing angel and venture financing in the United States to follow federal regulations, rather than face different rules between states....

Angels sing: ‘frankly ridiculous’ restrictions might ‘destroy Silicon Valley’ | VentureBeat

This really makes no sense. Venture and angel investors do not represent systemic risk, did not seek or receive bail out money, and do risk their own funds. Making it more difficult to invest in seed and early stage companies just squelches innovation and job creation.

Most reactions - Past 7 days

Forum List