An East Hartford organization that promotes technology in the state says it is successfully working with Sen. Chris Dodd to amend his financial reform bill to ensure entrepreneurs have access to “angel” capital and that investors are better shielded from fraud.
Matthew Nemerson, president of the Connecticut Technology Council (CTC), says Dodd is receptive to the group’s recommendations to protect the nationwide pool of “angel” capital. Angels are high-net worth individuals who typically invest in early-stage development of business start-ups.
In a statement Thursday, Nemerson said the CTC, as well as its national counterpart, were concerned Dodd’s reform bill posed complicated and expensive regulations for angel investors.
“There was great concern that the reform bill might seriously cripple the angel investing world,” Nemerson said. “We got Senator Dodd’s attention and his people were happy to make the changes suggested by the group.”
Dodd’s office confirms the senator “is working on ways to address their concerns.”
The amended bill would retain financial thresholds to qualify as an “accredited investor.” But as a compromise, the standard for net worth of $1 million would now exclude the investor’s primary residence.
It would also require that the Securities and Exchange Commission review the thresholds at least every four years to protect investors, the public and the economy.
In addition, the amended bill would ban anyone identified by state and federal authorities as a “bad actor” from engaging in private offerings.
The CTC represents some 2,500 technology firms that employ nearly 200,000.
