Presentation on theme: "The Cape Fear Capital Connection on MyTalker Radio. WMYT 106.7 fm Monday, October 13, 2014 Curtis Wright and Thomas Vass Discuss The SEC’s Proposed Rules."— Presentation transcript:
The Cape Fear Capital Connection on MyTalker Radio. WMYT 106.7 fm Monday, October 13, 2014 Curtis Wright and Thomas Vass Discuss The SEC’s Proposed Rules Making It Harder to Raise Capital. Trying To Understand The Logic of the SEC Investor Advisor Committee Rule on Accredited Investors
Begin With The 60 Year History of Rules For Raising Capital The Evolution of Securities Marketing and its Impact on Issuers, Intermediaries and Investors, By Dara Albright, Crowdfunding Beat, October 10, 2014 “Security offerings, like any type of product vying for market share and devoted customers, require a solid marketing strategy in order to target suitable investors. Otherwise, raising capital is all but impossible.”
Each Decade Had Its Own Technological Platform For Raising Capital, Diagram From Dara Albright.
Internet Technology Makes Raising Capital Easier Title II modified Reg D Rule 506(c) to allow companies to advertise and market to find accredited investors. Title III was supposed to make it easier for non-accredited investors to make investments.
The SEC Has Failed To Act On Title III, For Non-Accredited Investors The U. S. Congress gave the SEC one year to implement Title III. The SEC has failed to act, and the proposed rules make it nearly impossible for companies to sell securities to non- accredited investors.
The SEC Is About To Make It Harder For Accredited Investors Under Title II Everyone out of the Pool! IAC Makes Recommendations Which Would Significantly Decrease The Pool of Available Accredited Investors, CrowdFund Insider, October 10, 2014 By Anthony Zeoli, (who we interviewed last week about New Mexico)
IAC Made 4 Recommendations on Accredited Investors “…if the SEC chooses to accept and implement any of the IAC’s constrictive recommendations, the effects on the private placement market could be disastrous.” Anthony Zeoli
IAC RECOMMENDATION 1 –DECREASE NUMBER OF ACCREDITED INVESTORS. From the SEC Report: “a closer analysis reveals that a significant percentage of individuals who currently qualify as accredited investors are not in fact capable of protecting their own interests, “ Interpretation: Citizens are too stupid to make investments and only the government can protect the citizens from making bad choices.
RECOMMENDATION 3 – DECREASE NUMBER OF ACCREDITED INVESTORS BY SETTING A MAXIMUM LIMIT ON THE INVESTMENT BY THE INVESTOR. From the SEC Report: the Commission should consider alternative approaches to setting such thresholds – in particular limiting investments in private offerings to a percentage of assets or income – which could better protect investors without unnecessarily shrinking the pool of accredited investors.
RECOMMENDATION 4 – DECREASE NUMBER OF ACCREDITED INVESTORS BY MAKING DEFINITIONS SO COMPLEX THAT ONLY A CPA OR ATTORNEY COULD VERIFY THE INVESTOR’S CREDENTIALS. From The SEC Report: “…adjusting the net worth threshold for inflation would exclude roughly 60 percent of the households that currently qualify as accredited based on net worth.”
What Is The Motivation of The SEC To Cripple The Private Placement Marketplace? This is an example of Obama Democrat Socialism trying to destroy the American economy. Socialists despise America and hate the free enterprise system. They will do anything and everything in their power to destroy it.
What The Cape Fear Valley Needs To Do Now Disengage from Washington by passing state legislation on crowdfunding. Create regional capital markets that target capital to regional small tech companies. Focus policy attention on supporting private sector technology innovation and product commercialization.
MyTalker Radio and The Cape Fear Capital Connection Have Offered A Better Model of Regional Innovation For The Cape Fear Economy Generation 1 Deal Mapping for Ideas Deal Creation Deal funding Deal Exits Profit Re-investment in Regional Companies Generation 2 Deal Mapping Deal Creation Deal funding Deal Exits