Angel List Founder Naval Ravikant: “How I Changed The Jobs Act”

In perhaps the worst kept secret in venture history, SecondMarket and AngelList have teamed up to allow accredited investors to legally invest purely online on AngelList for the first time. Basically, it’s getting a head start on the JOBS Act while we wait for it to become law. It’s a far more conservative– and legal– approach than other early crowd funding efforts like FundersClub, because SecondMarket is an actual broker/dealer.

We got a preview of this last week, when we wrote about Transcriptic’s wild seed round — the first company that used the partnership to round out its already successful, mega seed round. Founder Max Hodak described the experience by saying, “The Internet was just trying to throw money at us.” He added, “I don’t know what (AngelList co-founder Naval Ravikant) and SecondMarket are doing but they are clearly where the money is.”

Not every company will have such a barn-burner of an experience, but SecondMarket and AngelList are trying to replicate what worked in that case. Like Transcriptic, they are handpicking only companies that have a strong, well-known lead investor already, an easy to understand business, and some sort of momentum.

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Crowdfunding Will Bring More Capital To Small Businesses, Panel Tells Congress

Washington, DC — September 13, 2012 – The Securities and Exchange Commission should move with “due speed and clarity,” a panel urged the House Joint Subcommittee Hearing on JOBS Act Implementation. Naval Ravikant, CEO of AngelList, tesified that crowdfund investing will bring more capital to small business, adding ”Today’s small start-ups are tomorrow’s Fortune 500 employer.”

The committee originally scheduled the hearing to get a progress report from SEC chair Mary Schapiro, regarding the creation of rules that will implement the JOBS Act. The Jumpstart Our Business Startups Act requires the Securities and Exchange Commission to launch regulations to govern crowdfund investing. The Act will enable small businesses to raise up to $ 1 million per year from small investors through online, crowdfund portals.

Although Ms. Schaprio could not attend, members of academia, small businesses and the crowdfund communities urged that job creation visioned under the JOBS Act should move forward with due speed and clarity. “Critics have argued loose rules may invite fraud, Mr. Ravikand testified. “Rules that are too tight, however, may repel the good companies – the ones who drive all of the economic returns for investors.”

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