In which Congress once again contributes to the problem

[unixronin]

I don't appear to have access to the full article (the portion I can access is here; you may be able to read the whole thing), but writerspleasure points out that Sen. Chris Dodd's financial reform bill includes an ill-conceived measure that would place severe restrictions upon "angel" investors funding startups.

I don't know, and won't speculate, why Sen. Dodd is doing this, except to ask cui bene, but as pointed out in writerspleasure's post, this would be a disaster.  Startups funded by angel investors are less than 1% of all companies operating in the US, yet account for around 10% of new jobs, in addition to being one of the major sources of innovation in the US.

This measure sounds as though it would be tantamount to taking an already-staggering startup segment of the economy out behind the barn and slitting its throat over a bucket.

Comments

[mazianni.livejournal.com]

Found this in an op-ed piece:

For example, the bill would delay and curtail investments by "angel" investors in promising startup companies. This is because it paints with too broad a brush, targeting the activities of acknowledged frauds like Bernard Madoff, but splattering the entrepreneurial economy in the process. (http://www.oregonlive.com/opinion/index.ssf/2010/04/financial_reform_waits_for_ano.html)


Another article said:

As originally written, the bill would have raised net worth and income requirements for being an accredited angel investor from $1 million and $250,000, respectively, to $2.3 million and $450,000.

It also would have subjected angel investors to more stringent regulation, especially when a deal involved angel investors from more than one state. (http://articles.courant.com/2010-04-23/business/hc-hc-financial-reform-angel-ca.artapr23_1_angel-investors-reform-bill-matthew-nemerson)


Another article at Business Week (http://www.businessweek.com/news/2010-04-23/angel-investors-close-to-deal-removing-curbs-from-finance-bill.html) states the situation is still fluid with negotiations taking place, but it seemed likely that the angel investor restrictions would be scaled back.