Looks like whoever reposted John Mauldin's weekly newsletter chopped off the section that needs to be included to be allowed to repost it. Jerk move. Because John's newsletter is awesome - he's best when discussing the implications of skyrocketing sovereign debt - and because you might want to subscribe to it, here's what the article omitted:<p><i>You have permission to publish this article electronically or in print as long as the following is included:</i><p><i>John Mauldin, Best-Selling author and recognized financial expert, is also editor of the free Thoughts From the Frontline that goes to over 1 million readers each week. For more information on John or his FREE weekly economic letter go to:</i> <a href="http://www.frontlinethoughts.com/learnmore" rel="nofollow">http://www.frontlinethoughts.com/learnmore</a>
Duh, big banks would win. Think about it, if they remove competition from the private equity market, then they monopolize capital financing.<p>This revision is nothing more than a monopoly bid.
While there is inherit risk involved in angel investing, it has been a fairly straightforward method for increasing one's wealth. It is becoming increasingly clear (to me at least) that this congress and administration are using regulation and governmental control to stifle and limit the production of wealth that cannot be taxed at a high rate. In most cases, an angel investment will be taxed as a capital gain, and usually one that is considered long term at a lower rate.
How many angel investors really have less than $2.3 million in assets?<p>If I had to guess, I'd say that the increase in the cap was to try to cut down on Wall Street shysters ripping off doctors and marketing VPs. People with less than two million in assets are probably not full time investors, but rather are working-wealthy. They have day jobs and they don't have staff accountants or lawyers.<p>But I could be wrong. Maybe this cap will have a negative impact on Angels. If so, the thing for Angel firms to do is contact your California senators, whose votes will be critical in the passage of the bill, and get an amendment
I want to know who, by name or agency, thinks raising the 'accredited investor' thresholds is a good or necessary step.<p>Accredited investors aren't asking for this change. The participation of private investors (of any net worth) in regular equities was a non-factor in current financial troubles, or indeed any financial troubles of recent decades.<p>If lessons from the recent crisis are what's motivating new net worth requirements on investments, how about new rules to block submillionaires from buying homes? That's be more rational as a reaction to the mortgage bubble than blocking millionaires from investing in companies!<p>(I don't expect even lame-duck Dodd to tell average Americans they're too easily duped to own homes; we should be equally outraged he wants to tell millionaires they're too easily duped to make private equity investments.)
I am naive on this issue, and I am going to assume good faith on the part of Congress for a moment. Presumably they are trying to protect someone - whom? It seems to me that angel investors were not the ones devastated by the subprime mortgage and banking crises. This appears to be a fix in search of a problem.
Please stop repeating the same bullshit that seemingly every VC pundit is repeating about the Dodd bill. The "2.3m" figure is a total fabrication!<p>The bill does not set new requirements at all. It just explicitly authorizes the SEC to adjust the income & net-worth requirements for inflation. The SEC was already empowered to alter the requirements independently of legislation (since they were not set by legislation), but they've never done so.<p>The figures quoted are pulled out of their ass — they just took the old figures and adjusted for the last 30 years of inflation since they were set. Nothing in the bill says the SEC has to adjust it all at once or at all.
Worst...written...article...EVER! This is the point (found 2 pages or 954 words down the article)<p>"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.<p>"First, 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."<p>He also makes the point that registering with the SEC is expensive ($100,000+ in legal fees) and that he believes the "accredited investor" limits will be raised even further. The rest of the piece is just filler.<p>(for anyone down voting this let me point out this article goes on for 9 printed pages and doesn't even explain who benefits from these clauses. That's just bad writing)