Have you ever wished that you had somehow invested in Facebook, Twitter, or Google before those companies became billion-dollar brands, back when they were first getting started?
The sad truth is that under our current laws, you never even had the chance.
Americans are allowed to gamble unlimited amounts at casinos, and can send donations to charities halfway around the world with one tap of a trackpad. Yet, we are legally prevented from making even modest investments in job-creating small businesses.
Because of Securities and Exchange Commission (SEC) regulations from eight decades ago, unless you’re the family member of Mark Zuckerberg or a very wealthy individual, the federal government essentially prohibits you from investing your money in the innovative businesses of the future.
In addition to being unfair to individuals or families who aren’t in the highest income brackets, it means that only “qualified” wealthy investors get to use their dollars to decide what could be the “next big thing.” It can cost up to $30,000 in legal fees to clear all the regulatory hurdles associated with completing a small share offering to wealthy “angel” investors. An initial public offering (IPO) is out of the question for all but the biggest companies.
Raising funds to file for a patent or buy a second delivery truck should be a simpler process, but laws that predate the first computer are stifling the ambition of today’s entrepreneurs to start or expand a business.
To bring the SEC up to internet speed and give Americans a better shot at competing in the global marketplace, I recently filed “crowdfunding” legislation – The Democratizing Access to Capital Act — which would allow small companies to offer shares of stock directly to ordinary investors through established and vetted peer-to-peer platforms. “Crowdfunding” is just a new term for an old idea: offering small-dollar investors the chance to invest in new ideas.
Continue reading ‘Creating A Nation of Venture Capitalists Through Crowdfunding‘ …