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Why aren’t there more angel investors in the market to invest in early stage companies?

March 28th, 2010 · 7 Comments

Why aren’t there more angel investors in the market to invest in early stage companies? You will be surprised to hear what our investigative team has uncovered. The government regulations designed to protect investors are being misused to limit investors’ access to information and free choice on asset allocation. Fear and greed driving the practice of misinformation only works to drive the cost up for entrepreneurs raising capital and limits the amount of capital available in the marketplace. The regulations don’t really protect high net worth investors, rather they inhibit free enterprise and access to capital. Tune in to learn what our investigative team has uncovered.

Listen to Karen Now!—BLOG TALK RADIO:  The Compassionate Capitalist

Listen, Learn, Enjoy and Share with a Business Associate!

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UPDATE:  Since recording this radio show with the specific intent to uncover what seemed like an oversight, a unanticipated outcome of regulation that severely impacts the early stage entrepreneur from raising capital, an even more insidious assault on free enterprise, wealth creation, and early stage companies bringing innovation to the market has hit our fair land.    I am thankful Google Alerts and Twitter, because without those two means to rapidly disseminate information, there is a good chance this change to the landscape of angel investing could sneak in on a bill and we would never be the wiser.

Here is a quick explanation of Senator Chris Dodd’s idiotic attempt at who know what the logic is….   when our jobless rate is at it’s highest, availability of credit is at the lowest, and many states have a proven history of economic growth when they encourage angel investment there are these proposed changes.   Taken from http://venturebeat.com/2010/03/26/angel-investing-chris-dodd/

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.

Frist, 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.

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What can you do?   Write your congressman and congresswoman.  Write your state reps and your federal reps.  Instead of regulating more, they need to regulate less.   Instead of taxing more they should encourage investment by the wealthiest into the most innovative companies by giving them a tax break.   Instead of taxing the wealthiest to give the money to the poorest, they should let financial advisers talk about angel investing into private companies as an asset allocation along with all the other assets, and then give them a tax break when they do make that investment.   If more early stage companies had money to grow, those poor unemployed folks would have more opportunities for jobs and reasons to get new skills so they are able to contribute to their community.   Encouraging investing is the best “trickle down” economic theory we could ever put in place.    —-  and there is a petition to sign and make it easy
Online petition – Stop The Repeal of Federal Preemption of Reg D Securities Offerings

Check out these investment websites: Karen’s twitter page: @Karen_Rands,

Business Finance Sources:  www.kugarandholdings.com,

Early Stage Venture Capital Consulting www.launchfn.com,

Network of Business Angels Investors www.nbai.net, www.kyrmedia.com,

Angel Investor Blog: www.myvirtualangelworld.com,

Free newsletter on raising capital for Entrepreneurs http://www.getinvestormoney.com/

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Tags: Entrepreneur Biz-Buzz · In The News · Podcasts

7 responses so far ↓

  • 1 George Thompson // Mar 30, 2010 at 2:02 pm

    Never realized there was such a barrier to entrepreneurs gaining access to capital from private investors…not only are the broker dealer’s set up, even authorized to take a huge chunk of the change, but those that would invest are being told not to…. just shaking my head.

  • 2 John // Dec 24, 2010 at 5:29 am

    Very nice site!

  • 3 Twitter Trackbacks for Why aren’t there more angel investors in the market to invest in early stage companies? [entrepreneurblogspace.com] on Topsy.com // Mar 30, 2010 at 3:42 pm

    […] Why aren’t there more angel investors in the market to invest in early stage companies? entrepreneurblogspace.com/2010/03/why-arent-there-more-angel-investors-in-the-market-to-invest-in-early-stage-companies – view page – cached BlogSpace for Entrepreneurs Seeking Early Stage Venture Capital, Small Business Investors & Resources Filter tweets […]

  • 4 biz bug // Apr 6, 2010 at 5:41 am

    i agree, great site. also take a look at mycomeup.com

  • 5 Trent Soumu // Nov 28, 2010 at 12:22 pm

    Never thought about how angel investors and the most wealthy would think about investing in private companies… I know my bsiness will make tons of money and just thought they would all see it. Thanks for sharing the insight.

  • 6 Richard Phillips // Dec 23, 2010 at 4:05 am

    Very interesting topic, your posts are always very intriguing. You really know your stuff! I’ll keep reading I love your blog.

  • 7 John1459 // Dec 24, 2010 at 5:19 am

    Very nice site!

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