The SEC ruled that solicitation for funds and companies was okay. AVC had a post about it saying, “Let the games begin.”.
The blog you should be reading when it comes to the SEC interpretation of all the rules is William Carleton’s blog, WAC6. He is an attorney in Seattle that I met at the Angel Capital Association conference a couple of years ago. He has been all over this for a long time, and can help entrepreneurs and people trying to raise a fund (like me) how to jump through the hoops.
It is supposed to take 60 days for the SEC to come out with the rules, but I suspect it will be longer.
My biggest fear is that there will be a scammer out there that steals money. There is no doubt in my mind that this will happen. Either they will pose as some sort of hotshot fund manager-or they will have an “idea” that they say will turn into the next big thing. Someone without the requisite capital will put there money in and will lose it all. They will have unwittingly gotten scammed. Imagine if Bernie Madoff had access to advertising.
The fear I have is in the aftermath of a major scandal, the backlash could be worse than what we had before. If there are those in Congress or the bureaucracy that are against the changes being made, they will actively seek out any thing that smells of fraud. Then they will turn it into something its not, and stir up emotion around it.
The good news is there is social media which can rate and review. Eventually, there will be aggregator sits that vet deals and people.
The other good news in my opinion is that the ruling gives people more freedom with their own money and ideas. This world was only open to accredited investors-read people that made more than $200K a year or had a net worth of more than $1M. If you were an average Joe, you couldn’t play-even if you saw the idea before anyone else and got it. Average Joe’s only avenue to try and play was to create a company and be successful.
The simple fact is, not everyone out there can create a company. It’s really hard. Harder yet to endure the pressure of being an entrepreneur and having success.
But, people ought to have the freedom to do anything they want with the money they have earned. It’s America. That’s why our country started.