East Coast Wants To Kill Silicon Valley Entrepreneurism

As always. This time, they will attempt with "Friend of Angelo" Chris Dodd's 1,300-page financial so-called "reform" bill, which already passed the Senate Banking Committee and now is being pushed through the Senate with hardly anyone paying attention as the stock market continues its melt-up. Financial firms' stocks are leading the way.

Among many other things to hate in the Dodd bill, the bill will require startups to register with the SEC before it attempts to raise funds, and wait for 4 months while the SEC review the application. Investors, who wants to fund these startups, will have to have more than $2.3 million net worth, or more than $450,000 annual income.

In startups, 4 months is an eternity these days.

If you have some brilliant idea and want to run with it, you can't, if the bill becomes the law. You have to apply to an agency under the jurisdiction of the US federal government - an agency who turned a blind eye to Madoff's ponzi, who is yet to do anything about high-frequency trading (or fleecing the investors) by the large Wall Street banks and hedge funds not to mention naked short selling, leveraged financial derivatives, etc.

If you want to invest in someone else's brilliant idea but your net worth is less than $2.3 million, you can't.

It looks like yet another form of restriction of capital flow, which is vital for a free market to function. The federal government wants to control that flow as it sees appropriate, which, in my wild guess, differs radically from what entrepreneurs and investors have in mind.

And yet another way to kill the goose that lays golden eggs.

For more, check out this article: Dodd's Financial Reform Bill Makes the Angels Cry (4/1/2010 Reason.com)

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