April 6,2010
Senator Dianne Feinstein
United States Senate
331 Hart Senate Office Building
Washington, D.C.20510
SUBJECT: OPPOSITION TO THREE KEY PROVISIONS IN SENATOR DODD'S RESTORING AMERICAN FlNANCIAL STABILITY ACT THAT WILL ELIMINATE MOST BUSINESS ANGEL FUNDING
Dear Senator Feinstein,
On behalf of the Keiretsu Forum, a global network of 850+ business angel investors
headquartered in Lafayette, CA, I am writing to state our opposition to three provisions in the Dodd legislation. By way of background, I started the Keiretsu Forum in California in early 2000 during the dot.com bust as a way for individual business angel investors in norther California to study early stage companies seeking angel funding (amounts from $500K-$3M).
During the past decade, Keiretsu Forum has grown to 19 chapters worldwide with
members on three continents. We are the largest and fastest growing private business
angel network in the world. We have eight chapters in California, four in the Pacific
Northwest, one in New York City, Paris, London, Barcelona, Madrid, Beijing and
Singapore.
Our members have invested $250M in 245 companies that would not have found
financial support in either the Venture Capital (VC) or debt markets. Across the US,
business angels provide the same amount of funding to emerging companies as do VC
firms but at the ratio of 27:1. In short, business angels fund the majority of small
companies seeking to expand into larger markets. These are the emerging businesses that provide almost all the new, high-value jobs in California and nationally.
All Keiretsu Forum members are "accredited" under the current SEC requirements (at
least $1M in net worth, annual family income of $300K or individual income of $250K).
Senator Dodd's bill would more than double those financial requirements. We believe
two-thirds of America's current business angel investors will disappear overnight if the legislation passes as written. Their disappearance will eliminate a key financial source of job creation at a time when new jobs are vital to re-invigorate the American economy.
The key provisions of the Dodd bill that affect business angel investing are:
o Sec 412 (page 380) Adjusting the Accredited Investor Standard for Inflation
o Sec 413 (page 381) GAO A Study and Report on Accredited investors . Sec 926 (pages 816{19) Authority of State Regulators Over Regulation D
Offerings.
I encourage you to contact Senator Dodd and advise him that those three sections of his legislation must be changed to reflect the current SEC regulations or angel funding will all but disappear in the US.
On behalf of the Keiretsu Forum, I urge you to vote no on Senator Dodd's bill until the provisions above are removed.
Thank you very much for your help in this matter.
Sincerely,
(signed)
Randall B. Williams
Founder/CEO
Cc: Senator Barbara Boxer (D-CA)
Senator Chris Dodd (D{T)
Senator Richard Shelby (R-AL)
Senator Charles E. Schumer (D-IN'Y)
Senator Jeff Merkley (D-OR)
Senator Mike Crapo (R-ID)
Califomia Attorney General Edmund G. Brown, Jr.
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