AngelList's Ravikant sounds alarm over new SEC rules
- Cromwell Schubarth
- Senior Technology Reporter- Silicon Valley Business Journal
- Email | Twitter | Google+
As I reported on Friday, he wrote a letter to the Securities and Exchange Commission warning of the dangers contained in new rules proposed to enact part of last year's JOBS Act.
Ravikant told me separately in an exclusive interview that he is confident that the SEC will do the right thing but that the startup community needs to speak up.
"A lot of times in the Valley we put our heads in the sand on government and regulators. We don't pay attention to what is going on," he told me. "But the SEC has a process that they follow. Normally it's only lobbyists and connected VC types who follow that process and we need to be part of that."
Ravikant said he wants to make sure that Silicon Valley knows about the comment period and participates.
"We have a unique position because we are dealing with lots and lots of startup financing," he told me. "So when that financing gets damaged or crashes because of new SEC rules we are going to deal with more of the damage and wreckage than almost anybody else."
The proposals that Ravikant and others are reacting to are set to take effect on Sept. 23. They allow startups and private investment groups to openly solicit money, but only if they file a Form D with the SEC 15 days before seeking funds. They also need to regularly update changes to their solicitation and file another form when the fundraising is completed.
All of that worries Ravikant. But he says the most troubling proposal is a one-year ban on fundraising for violators.
Cromwell Schubarth is the Senior Technology Reporter at the Business Journal. His phone number is 408.299.1823.
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