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Are new SEC Financing Rules a Threat to VC Business Model?

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August 30, 2012

As was widely reported the SEC in the US took another step this week towards lifting the ban on private stock offers (see Reuters). As the new regulations get closer to reality some people are speculating that crowdfunding and other methods of raising private capital could be a threat to the VC business model, according to Wired magazine.

 

Over at BusinessFinance, a reporter asks if the new regulations are a threat or a boon to jobs in the US. And elsewhere OpenMarket.com said the new regulation is a “victory” for free speech for VCs and hedge funds, pointing out that over the decades, the SEC rules had come to broadly define just about any type of communication with the general public as an illegal stock offering to investors not wealthy enough to qualify to invest in hedge funds and venture capital. No doubt this new ruling is proving to be a controversial one.

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