Save Regulation D, startups, and angel investment.

If you are not aware, Senator Chris Dodd’s financial reform bill seeks to repeal the SEC’s Regulation D Preemption, and contains the following three provisions that will undoubtably bring great difficulties to startups and the angel investment community:

To those unaware, Democratic Senator Chris Dodd’s financial reform bill seeks to repeal the SEC’s Regulation D Preemption, and contains the following three provisions that will undoubtably bring unneeded time and cost barriers to startups and the investor community:

• Any startup looking to raise money would be required to register with the Securities and Exchange Committee and wait 120 days for the SEC to review such filing.
• The wealth requirements of being an “accredited investor” (an entity that can invest in higher risk investments) would be raised from an annual income of $450,000 (currently $250,000), or net worth of $2.3 million (currently $1 million). (Today, this would disqualify 77% of angel investors.)
• The United States preemption permitting investments to adhere to federal regulations as opposed to individual, state regulations would be removed, thus increasing compliance costs and complexity when financing across state lines.

The purpose of the bill is to provide protection against a future financial crisis, but these provisions clearly will do more harm than good.

Sign the petition to support startups and save Regulation D:
http://www.saveregd.com/