Robert Litan says proposed 'protections' for angel investors in Dodd bill are unnecessary and will hurt America's job creators
Kansas City, MO, March 14, 2010 – Just say no to Section 926 of the comprehensive financial reform bill outlined by Senate Banking Committee Chairman Senator Dodd, says Kauffman Foundation Vice President Robert Litan.
In an opinion piece published today in the Huffington Post, Litan honed in on provisions in this section that would raise the costs of seeking angel investors—individuals with substantial wealth or income who invest in startup firms—and require companies seeking angel investments to file with the Securities and Exchange Commission, which would have 120 days to review it. Currently, startup companies can raise money quickly from accredited angel investors without state or regulatory approvals. The Dodd provisions also would double the net worth or income thresholds for investors to be “accredited.”
Litan says the provisions "are both unnecessary and unhelpful at a time when policymakers should be looking for ways to make it easier to finance new businesses, especially the potentially high-growth, job-creating companies capable of attracting outside investors."