

Feds to Break Up Tech’s Investor Party - lnguyen
http://www.wired.com/business/2012/08/sec-tech-investors/

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skylan_q
Good thing we have the SEC to protect us from soliciting the need for
investment in a startup! ....?

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lhnn
My thoughts exactly. Why can't someone just ask others for money? What is so
wrong with "broadcasting" a solicitation for money?

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ahi
This is one of those situations where the regulations were effective so we
don't remember why they were put in place. Basically every other grandma was
having her purse emptied by a good looking scam artist.

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jaekwon
We already have plenty of that.

We can penalize the scam artists. That's not excuse for limiting grassroots
dealflow.

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rprasad
We can go after the scam artists today _because_ of the same regulations that
disallow this party.

The only reason people think these regulations are unnecessary now is because
they've never experienced the types of fraud that these regulations were meant
to address.

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tedsuo
I don't clearly understand this, but does it create a scenario akin to a "pre-
ipo ipo" where start-ups can get funding from the general public?

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bps4484
No, from what I understand there are no changes to the rules about investors
needing to be accredited (<http://www.sec.gov/answers/accred.htm>) which
prevents the general public from investing.

This would just allow startups to publicly state "I want investment" instead
of saying "I have this awesome startup [wink wink]" and waiting for an
investor to say "would you like investment?".

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pash
That's wrong. The crowdfunding exemption of the JOBS Act is precisely an
exemption to the rules that restrict investment in start-ups (really in any
company not registered with the SEC) to accredited investors. There will still
be restrictions—for example, only companies raising $1MM or less qualify, and
nobody can invest more than a certain fraction of their annual income. See
Title III, Sec. 302 of the act [0] for details.

0\.
[http://www.gpo.gov/fdsys/pkg/BILLS-112hr3606enr/pdf/BILLS-11...](http://www.gpo.gov/fdsys/pkg/BILLS-112hr3606enr/pdf/BILLS-112hr3606enr.pdf)
[PDF]

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bps4484
good to know, thanks for the correction.

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nateberkopec
"The rules will also undermine a key advantage of Silicon Valley venture
capitalists and “super angel” investors: Dealflow. Since startups haven’t
previously been able to broadcast that they are raising money, they must
approach potential investors directly, and they tend to reach out only to the
biggest names."

Ha ha, good joke - I mean, journalism.

