Tag Archives: angel investors

Our Congressional Testimony: Reversing the Decline in Capital Formation

“Reversing the Decline in Capital Formation”

 

Testimony of

 

Sherwood Neiss

Entrepreneur

Sherwood Speaks, LLC

Miami Beach, Florida

May 10, 2011

Before the

Committee on Oversight and Government Reform

United States House of Representatives

The Honorable Darrell Issa, Chairman

The Honorable Elijah Cummings, Ranking Member

Introduction:

 

Chairman Issa, Ranking Member Cummings and members of the Committee, thank you for holding this hearing today and allowing me to share an entrepreneur’s perspective on improving capital formation through regulatory modernization.  My intention is to explain why outdated securities laws — put in place before the Internet age — need to be modernized and overhauled, and how these reforms can boost our struggling economy.  By revamping the Security and Exchange Commission’s (SEC’s) position on solicitation and accreditation, we can open the doors to small business growth and prosperity.  Allowing for an exemption for Crowd Fund Investing, which includes protections for investors, will spur innovation among your constituents, create jobs, increase consumer spending, and reinvigorate our economy. Continue reading

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Access to Capital #1 Problem for Startups

 

Techcrunch reported today that 83% of startups are planning on hiring in the next 12 months to keep up with expected growth. This is great news for these industries and for job seekers alike.  However, once again we see the same problem emerge.  According to the survey by Silicon Valley Bank that the article was based on, the number one thing holding these startups and small businesses from growth is access to capital. The traditional means of financing startups (e.g. bank loans & credit cards) are not working.  Trying to fix that problem will take more than bureaucracy and a campaign.  The solution is simple and is right in front of our eyes.  Regulatory changes need to take place to get capital flowing from the people that have it to the people who can use it to build their businesses, employ more people, and get our economy back on track. Angels and VCs do a great job but there simply aren’t enough of them to inject capital in all the companies that need it. Creating a new class of micro-angles is one way to get this capital flowing and the economy growing.  Believe it or not, they are already doing this on websites like Kickstarter and Indiegogo, we should continue to encourage this behavior by allowing the average American to invest in entrepreneurs rather than just donate their money.

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