Thursday, November 10, 2011

JOURNAL: HR 2930 and Open Source Funding

JOURNAL: HR 2930 and Open Source Funding:

Open source funding is coming. About time.

In a big departure from previous behavior, a very cool new bill just passed the US House of Representatives. It's called H.R. 2930: The Entrepreneur Access to Capital Act.

Basically, the bill eliminates most of the legal barriers (restriction on the number of investors, the type of investors, etc.) to raising small amounts (<$2 m) of capital through the sale of equity. If it passes, it will allow entrepreneurs to bypass the entire vulture capital bottle neck (nice) and go directly to the public for its first rounds of funding.

Of course, this new capability (if it passes) is going to be abused (bucket shops across the country are gearing up in anticipation). However, most of that will be sorted out in time.

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