New rules take effect today allowing young companies to advertise for investors. For decades, raising private capital has been, well, private. By law, investment deals had to avoid publicity.
That Securities and Exchange Commission ban is now lifted. Companies can even crowd-source online to raise funds.
But, at the same time, other restrictions also take effect aimed at limiting the exposure of the common investor. An investor now needs to be ‘accredited.’ Many see the move to open the investment process to more scrutiny as a positive step toward transparency.
Cromwell Coulson is CEO of OTC Markets Group, which operates electronic marketplaces for companies trying to sell stock, but are not big enough for the stock exchanges. He says that the secrecy shrouding the old system made it easier to commit fraud.
“If there was no ban on general solicitation in advertising, information about what Bernie Madoff was doing would have gotten out sooner, and his fraud would have collapsed much earlier,” says Coulson.
The ability to publicize could have major results for start-ups. Coulson says, “It should open-up and unlock a lot of access to capital. And that should be great for small companies.”
On the other hand, new rules also restrict who can respond to the ads soliciting new investors.
In the past, rich people could check a box to affirm that they were, in fact, rich. Now they’ll have to prove it.
Warren Hanselman is with the San Diego Tech Coast Angels, a kind of investment club for very wealthy entrepreneurs who help each other vet new investment opportunities.
“Basically, you need to demonstrate with your tax returns, or you have to have an accountant do a audited statement and certify that, within the last 90 days, they’ve looked at your financials and you qualify as a high-net-worth individual,” says Hanselman.
Some see the new accreditation hurdle as one that’s not worth jumping.
“Every angel investor I know of, that I have talked to, said there is no way that I’m ever going to do that. I’m not going to turn my books over to the company. I’m not going to have to, every 90 days when I want to write a check, go to an accountant to get the forms filled out,” says Hanselman.
So while ads may reach more potential investors than ever, the restrictions could backfire with the super rich.
“They’re making it extremely difficult for angel investor to write a check,” says Hanselman.
West Hollywood, California, has just put into place one of the first bans on fur sales in the country.
But it isn’t likely to stop that many people from buying a new fur coat. Even supporters will tell you that.
“I do think this is mostly a symbolic ordinance, given how tiny our city is and the small number of businesses affected,” says West Hollywood Mayor Pro Tempore John D’Amico, “But clearly, its reach and the discussion about it, that’s the effect we hoped it would have and it has been having.”
Many animal rights activists see it as a victory. Others, like Rutgers law professor Gary Francione, think symbolic bans like this are a distraction.
“It’s not really changing things and it’s not going to change them. West Hollywood can do whatever it wants to do,” he says.
Francione says these sorts of splashy bans can help groups raise money. But he thinks they aren’t all that helpful in getting people to think seriously about the welfare of animals -- like the one they’re having for dinner.
Pregnant women are told not to drink, smoke or stress out. But it hasn't been clear how those choices may affect a fetus. By studying how genes are turned on and off, scientists say they are getting closer to understanding what experiences in the womb really affect a child's health.
It used to be that neuroscientists thought smart people were all alike. But now they think that some very smart people retain the ability to learn rapidly, like a child, well into adolescence. That means they have a longer period of time to learn from their environment — and maybe learn Chinese.
Pregnant women are told don't drink, don't smoke, don't stress out. But it hasn't been clear how those choices may affect a fetus. By studying how genes are turned on and off, scientists say they are getting closer to understanding what experiences in the womb really affect a child's health.
The French bakers' lobby has launched a campaign to keep bread on people's minds. Their slogan, which is plastered on billboards and inscribed on bread bags, is "Cou cou, tu as pris le pain?" which translates roughly as, "Hi there, did ya pick up the bread?"
Former U.S. Rep. Gabrielle Giffords of Arizona was honored over the weekend for her service to the public by Scripps College. Her alma mater awarded her the school's highest level of recognition: the Ellen Browning Scripps Medal.
In cities across the U.S., High Occupancy Vehicle -- or HOV -- lanes are giving way to HOT lanes: High Occupancy Toll. Traffic jammed? Just scoot into the HOT lane and zoom right past, as long as you’re willing to pay.
“I personally don’t want to pay,” says Janelle Mobley, as she waits for her car to be washed just off I-85 north of Atlanta. A HOT-lane system went into place on the highway about a year ago.
“I mean they take enough out of my taxes to pay for these Interstates,” she says, adding that she’d rather sit in traffic than buy her way out.
More and more Atlantans are using the HOT lanes. But not a lot was known about those drivers until a recent study by the Southern Environmental Law Center. It analyzed zip codes of paying drivers and found a correlation.
“What the data shows is there is some relationship between income and use,” says senior attorney Brian Gist.
The SELC found the richer the zip code, the more likely a driver is zooming along in the HOT lane. Trips can cost anywhere from a few cents up to $8 -- at least that’s the highest toll so far.
The state waives tolls for some vehicles, like three-person carpools. Even so, exempt drivers still have to obtain a windshield transponder, like toll payers, and register each trip in advance.
Gist says only a small fraction of drivers opt for the HOT lane.
“What we need to do is look for a solution for 100 percent of the people, rather than 5 to 10 percent of the people,” he says.
Bert Brantley, deputy executive director of the Georgia State Road and Tollway Authority, says the SELC study failed to take into account one in seven HOT-lane trips is actually a free ride.
“So really the analysis is very limited,” he says. “It is certainly of value to look at these kind of things, because we’re spending tax dollars to build the project.”
It cost $56 million to convert the current section of I-85 that’s now has a toll lane.
Brantley says the state will look at income disparity when more data become available later this year. In the meantime, he says, the lanes ease congestion.
But they don’t solve the bigger issue, says Rod Diridon of the Mineta Transportation Institute.
“HOT lanes are a band-aid,” he says, adding that the only long-term fix is to invest in public transportation.
For now, new “Lexus Lanes” are coming to San Francisco, Denver, Charlotte and even Atlanta, where the state government plans to have a HOT lane in just about every interstate that traverses the capital.
Microsoft Corp. is expected to announce new Surface tablet computers, including a version with a smaller screen to compete with Google's Nexus 7 and Apple's iPad Mini. It comes about a month before Microsoft releases an update to its Windows 8 operating system on Oct. 17.
Claudia Felder spent nearly 10 difficult years in and out of the U.S. foster care system. Now 21 years old, she lives with a loving family. But there are nearly 400,000 kids in foster care, and one researcher says that the problems they face are so intractable because they are also society's problems.
The president spoke at the memorial for the 12 victims of Monday's shooting at the Navy Yard in Washington, D.C. While acknowledging the unique grief of the families present, he also called for change to prevent future mass shootings.
The Common Core initiative would standardize academic goals nationwide. Forty-five states have signed on, but lawmakers in some states are rethinking their support. While both sides are stepping up their messaging, a poll out this month shows 62 percent of Americans have never heard of the Common Core.
An al-Qaida offshoot has taken Azaz from Western-backed Free Syrian Army fighters, demonstrating the growing power of jihadists. Azaz, an economic gateway between Syria and Turkey, is now cut off.
Cyclist Jacob Landis, who rode more than 10,000 miles to raise money for cochlear implants, will miss out on the final miles of his ride after being hit by a truck Saturday. Landis' goal was to ride to every Major League Baseball stadium; he says he'll still go to the final game on his schedule.
Democrats in coal-producing states will likely use every chance they get to separate themselves from President Obama in voters' minds. The EPA's new power plant rules are just such an opportunity. After all, Obama is about as unpopular in those states as coal is popular.
A U.S. Navy helicopter has crashed in the Red Sea, carrying a crew of five, the military service says. The status of the crew is not yet known; a search and rescue effort was begun after the crash. "The crash was not due to any sort of hostile activity," the Navy says.
Survivors' accounts and photographs provide new detail to the chaos that erupted Saturday. Attackers used grenades and guns to begin a standoff in a Nairobi mall that lasted into Sunday.
Two suicide bombers struck after a service at the All Saints Church in Peshawar, Pakistan, Sunday, killing more than 70 people and wounding more than 120, multiple reports say. The victims are believed to include children.
Chancellor Angela Merkel led her conservatives to a stunning victory in Germany's election Sunday, a personal triumph that cements her position as Europe's most powerful leader. However, she will need to reach out to center-left rivals to form a new government after her coalition partner crashed out of Parliament.
A Chinese court has sentenced Bo Xilai, the former Politburo member who was snared on graft charges, to life in prison. The sentence for offenses that include bribery, embezzlement, and abuse of power completes a shocking fall for Bo, who had been a rising star in China's political system.