Why Does Financial Reform Punish Startup Companies And Angel Investors?

We are somewhat puzzled by the reaction in the Tech community to these new Financial Reform regulations since the Tech community was almost solidly behind the election of Obama. Does this mean that the Techies have discovered that Obama's campaign promises were rhetoric, and he could care less about new and innovative ideas that start up new businesses? That didn't take long if that is the case. More and more articles are pointing to the fact the Tech Community has jumped off the Obama/Progressive bandwagon after learning it will hurt their entrepreneurship.
When some of us were so opposed to Obama in 2008 and were scared of what he was going to do to the Country, we were called racists. No one in the liberal mainstream media bothered to ask what we opposed about Obama -- they just automatically called us racist because we dared to differ with Obama and his socialist agenda disguised as moderate. Their rhetoric and that of the Obama campaign was "How dare you oppose anything Obama says?"

Didn't take rocket science to discover there was nothing moderate about Obama's background --from how he was raised to his friends throughout his life including the former Weather Underground members in Chicago to his radical church to his mentor in high school all screamed radical.

It is nice to know that other segments of the Country are starting to figure out that Obama is not a friend of small business and never will be. It doesn't fit his socialist agenda. If they would have paid more attention, they would have seen his rhetoric of transparency was just that rhetoric during the campaign. Why anyone thought Obama would be transparent running the Government when he refused to release anything from his birth certificate to his adoption, to his religion as a young boy to his school/college records, to his writings, or to his medical records for starters. The candidate Obama was a closed book.

Anyone who doubts that Obama has a socialist agenda today hasn't been paying attention and are most likely connoisseurs of shows like Keith Olbermann and Chris Matthews who no matter what this President says or does go along with everything getting downright giddy at times. They are so far gone we don't see how MSNBC can keep them on the air. That said, one thing MSNBC will never be accused of is being 'fair and balanced' as they are as far left as you could possible get. We are waiting for MSNBC to start hiring former members of the Weather Underground as anchors and producers next if they haven't already.

Take a look at what Chris Dodd is working on with the Financial Reform legislation and ask yourself why Obama and the progressives in the Congress want to destroy more of our economy? You may not like the answer. What Obama has done for Congress is allow the progressives aka socialist a stage to move his/their radical agenda forward. The Progressive Democrats are just giddy in Congress at finally getting their socialist agenda passed.

As witnessed below, the Tech Community doesn't like what they are seeing.

Why Does Financial Reform Punish Startup Companies And Angel Investors?

from the not-good-at-all dept

26 March 2010

It's amazing how badly politicians who know a little bit can screw things up. Apparently, Chris Dodd's financial reform bill contains a somewhat horrifying clause that would seriously harm the ability of startups to raise angel financing. Startups raising angel money are about as far from what caused the financial crisis as anything I can think of, and yet, the financial reform bill contains some ridiculous provisions:

Under existing law, startup 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.

The negative impact of the SEC filing requirement would be aggravated by the proposed doubling of the net worth or income thresholds required for investors to be "accredited."

As someone who has raised a fair bit of money from accredited angels in the past, this proposal would be quite troubling. The idea that a company would need to wait four months before it can get the money it needs would kill a lot of startups. There is no evidence that the angel funding process has been problematic in any way. In fact, some might argue that it's one part of the financial system that works incredibly well. So why are politicians mucking with it?

Source: Tech Dirt