Raising money in the post Dodd-Frank world is HARDER
Raising capital in the post Dodd-Frank world is harder for all start-up and emerging business, both private and public.
Dodd-Frank and other regulatory “reforms” have driven dozens and dozens of smaller broker-dealers out of business, have eliminated virtually 100% of the investment analysts and retail sales people who formerly mentored and assisted smaller-cap public and private issuers in raising capital. These reforms have also thoroughly discouraged broker-dealers from committing capital to make trading markets and create trading liquidity for smaller-cap companies.
The cumulative weight of these have effectively poisoned the smaller-cap public company ecosphere and have crushed the valuations of smaller-cap companies as well.
These also have had a corresponding cascading, negative “downstream” effect on private start-ups and emerging companies as well. The US public capital markets were once the envy of the world; the capital market ecosystem, both public and private, was healthy; and, there was reasonable access to sufficient capital for smaller companies to enable them to grow, prosper, and become the next “S&P 500” company. Not so any more.
Moreover, women-founded startups are less likely to be funded by a venture capital firm than the earth being hit by an asteroid. It’s even worse for startups founded by blacks and other minorities.
In sum, entrepreneurship in America is dying and there are more rusty cars in America’s garages than new businesses, with lack of capital being a major root cause. Inadequate capital = business death, job loss, unemployment, and death of the American Dream of upward mobility for all economic classes. It’s a simple equation.
I’m helping organize The JUMMP Coalition (“Jobs Upward Mobility and Making Markets Perform”).
The Coalition will be a “big tent,” bi-partisan, multi-racial, male and female, and all socio-economic groups coalition. It will be comprised of a 501(c)(4) non-profit advocacy group and an associated 501(c)(3) tax-deductible entity to fund research into problems that keep the poor, “poor” and limit American competitiveness.
Its broad purpose is to reinvigorate the American Dream and support public policy initiatives intended to create a healthy capital markets infrastructure to support future generations of Americans.
One specific objective of the JUMMP Coalition is to further the work of the US House Financial Services Committee in creating JOBS Act 1.0 and JOBS Act 2.0 and Jobs Act 3.0, which regrettably died in the US Senate.
The JUMMP Coalition will focus on broader, long-term public policy goals relating to the following topics for the betterment of the US capital markets and to maintain the American Dream of upward mobility:
- US public and private capital markets, including a comparison of the same to capital markets in other countries,
- US human capital markets, including a comparison of how we support and prepare human capital to contribute to the economy,
- company formation and entrepreneurship,
- capital formation,
- job creation,
- social and economic upward mobility,
- income disparity,
- discrimination in debt or equity capital investments,
- the operation of the US capital markets with respect to women, minorities, and people of color,
- the effect of US capital markets and human capital policies on US national security, and
- US technology leadership
Contact me at email@example.com to discuss this topic further.