American companies are having a very difficult time raising the money they need to grow their businesses. It’s not because the money is not there but rather because it is not flowing from the people who have it to the people that can use it to grow our economy. One of the things that has always made America great is our ability to innovate. Unfortunately, innovation is currently being stifled by overly strict SEC regulations. These regulations however are not stoping other countries from innovating and riding off the coat tails of US entrepreneurs.
GrowVC, a Chinese company, has now launched with its intention to fill this funding void by collecting money from investors (including Americans). Â They already have successful cases of US Startups raising capital from them. Â What does this mean? First, by being offshore they just worked around the entire SEC process. Â And second, the future success stories of the USA as well as their technology, Intellectual Property and future profits will be owned/shipped overseas. Â The one major loophole in these regulations is that if you are not an American or an American company, you are not regulated by these security laws. Clearly, these outcomes were not the intention of the Securities law however it is exactly what is happening. I personally don’t feel that selling our nation’s entrepreneurs to foreign countries is in anyone’s best interest.
By making common sense amendments to the 1933 and 1934 Securities laws we can stop this mass export of US entrepreneurs and get back on track to recovery and innovation.