According to Mashable.com, the U.S.’s proposed Financial Reform bill could place some pretty tough constraints on angel investors, possibly upsetting the balance of early-stage venture capital for tech startups.
A report got into the nitty-gritty details of the massive bill and uncovered some stipulations that would definitely affect the early-stage investment market, possibly making raising funds for web-based and technology startups a whole lot more difficult.
Three main points have been identified as applying to angel investors, who are typically among the first to find and fund very early-stage tech companies:
1. Investors will have to be worth more money.
2. Startups will undergo a 4-month SEC review.
3. Angel investments will be under state control.
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