Category Archives: Funding Gap

The Sweet Smell of Progress

Cover Story WSJ - April 8, 2011

It has been just over 1 month since we launched this initiative and today we take heart in the fact that the SEC is listening to our concerns.  Without directly mentioning our names, Startup Exemption was part of today’s (April 8, 2011) Wall Street Journal cover story: U.S. Eyes New Stock Rules – Regulators Move Toward Relaxing Limits on Shareholders in Private Companies ( – subscription required)

On March 22nd a Congressman we have been working with sent a letter to the SEC asking them to explain if there is a correlation between the decrease in capital formation in the U.S. since 1996 and antiquated U.S. Regulations.  In that letter we contributed six questions that asked the SEC to respond to our crowd fund investing solution that could immediately get capital flowing to entrepreneurs but is hindered by regulation.

In particular we asked: Continue reading


How risky is Crowd Fund Investing (CFI)? Capital Flow & Investor Protection

Crowd Fund Investing is probably less risky than public companies because the crowd has access to more, and easier to understand, information about the entrepreneur and his company.  In CFI, no one is forced to make an investment.  Quite the contrary, people typically won’t make an investment unless they feel comfortable about an idea and the entrepreneur behind the idea. His executive summary will discuss the idea, how it will make money and why people should invest in him.  Since CFI is an “all or nothing” platform, if an entrepreneur doesn’t hit his funding goal because he didn’t have a winning idea or he asked for too much money, then the investors don’t fork over their cash.

Doing nothing isn’t an option because if we don’t get capital flowing to entrepreneurs/startups, then they won’t create the jobs that will spur the economy. Since the banks aren’t lending, credit cards are charging exorbitant interest rates and the private equity folks are only concerned about the next Facebook, someone has to help the little guy.

Crowd Fund Investing is based on groups of individuals giving small amounts of money, $50, $100, $500, to entrepreneurs to help them start their businesses.  While we suggest a $10,000 limit to each investor, based on the way crowd funding works, we highly doubt individuals will be making singular, large investments like that.  Another way, we reduce risk by limiting exposure. Continue reading


Whoopi and Neiss in the WSJ

Today the Wall Street Journal picked up the story of the startup exemption.  As more people hear about this exemption being pushed forward the more people that realize it is a tangible solution to getting money flowing in our economy.


The US Takes Steps to Improve the Economy by Focusing on Startups

Senators John Kerry, D-Mass., and Richard Lugar, R-Ind. are leading the way to ease immigration requirements for foreign entrepreneurs with their “Startup Visa” bill. There are many different requirements to qualify for the Startup Visa, but most importantly the foreign entrepreneur must directly create jobs for Americans.  Essentially, what this is saying is that foreigner entrepreneurs will be allowed to come and work in the US if they have a direct and major impact on the US economy.

These visas will not effect the overall immigration quotas in the US, they will simply be using unused visas. Entrepreneurs, small businesses and startups are the way we are going to grow our economy to get out of this recession.  The UK has already realized this and have passed a Startup Visa of their own recently. It is important to note that the crowd funding exemption we are talking about here at Startup Exemption is already allowed in the UK.  If the US does not move fast we are going to get left behind while entrepreneurs, money, and jobs flow overseas to the UK and other more forward thinking countries.


US companies look to China for investment

Small businesses and startups in the United States are having an increasingly difficult time raising the money they need to expand their businesses.  During the recent economic downturn funding has become increasingly difficult to find. Banks have stopped lending, credit card companies are tightening up their lending requirements, and there is substantially less Venture Capital and Private Equity available.

The money is out there but there but it is simply not flowing from the people who have it to the people that need it.  Making this problem worse is the stringent investment regulations that the SEC imposes on small businesses. Entrepreneurs and small businesses are starting to look outside the US for the capital they need to expand their businesses.

A recent article in the WSJ highlighted just such a situation.  A small manufacturing business in Riverside California, has been desperately searching for capital so it can hire more workers and expand its operations.  “During the downturn, we went on the hunt for capital, but after 44 presentations we came up short,” says Mr. Williams, 56 years old. Continue reading