While not the only factor in determining the success of a start-up company, having a knowledgeable and active Board member can help drive success in a start-up company and is a factor that should be evaluated.

We all collectively dodged a bullet after the collapse of Silicon Valley Bank which threatened to destroy a whole generation of startups. Had the US Treasury and Federal Reserve Bank not intervened quickly, many companies would have lost their hard-won deposits and the market collapse would have made it extremely difficult for them to access new financing. Many more companies in and outside the tech sector would have struggled as their products and services stopped working because of reliance on these newly defunct tech companies’ products. While the short-term impact would have been dramatic for our entire economy, the long-term impact would have been far greater because it would have likely resulted in an unparalleled mass extinction event covering a whole generation of companies.

The near-term crisis has largely been averted with the Federal Reserve, Treasury and FDIC regulators announcing that depositors regained access to 100% of their money starting Monday and that no losses will be borne by the taxpayer. The move should restore confidence and keep startups solvent and their employees employed, but there likely will be some longer-lasting psychological effects relating to capital risk that we should all be on the lookout for.

How the Accredited Investor Definition Unfairly Limits Investment Access for the Non-wealthy and the Need for Reform.

Angel Capital Association Announces Partnership with Millennium Trust
***For Immediate Release*** 

The Angel Capital Association (ACA), the world’s leading professional association for angel investors and startup entrepreneurs, has announced a partnership with Millennium Trust Company, a leading financial wellness solution platform. With an overall goal of educating and supporting angel investors, the ACA and Millennium Trust Company have forged a new 12-month partnership jointly believed to be of great benefit to the angel investment community.

John Guy, Manager, Emerging Companies Section Policy at Biotechnology Innovation Organization

Five years ago today, the Protecting Americans from Tax Hikes (PATH) Act was signed into law. This important piece of legislation included several provisions helpful to start ups like small biotechs, including permanently extending both the R&D Credit and the Small Business Stock Gains Exclusion (Tax Code Section 1202), providing both investors and the companies they invest in security without worry of losing access to the critical incentive in the future. 

By: Dror Futter, Legal and Business Adviser to Startups, Venture Capital Firms and Technology Companies

The SEC announced a series of amendments (likely to be effective early next year) to the rules governing private offering exemptions – by far the most frequent path for venture fundraising.  The amendments retain the same “menu” of exemptions but make incremental improvements. For the early stage community, the amendments include a very useful provision that excludes “Demo Days” from being considered general solicitations provided certain conditions are met. 

By: Emily Angold, ACA Marketing Manager

Three new board members were elected at the ACA Annual Members’ Meeting during ACA 2020 – The Summit of Angel Investing held virtually May 12-14, 2020.  In addition to the election of the new board members, one current board member was re-elected for a second term and a Vice Chair was elected.  The Board of Directors is currently made up of 15 members and four Chairs Emeritus. 

By Marianne Hudson, Executive Director Emeritus

The Securities and Exchange Commission issued a concept paper seeking comments on “harmonizing” securities offering exemptions a few months ago.  These exemptions, like Regulation D, which investors rely on for more than half of all private offerings, set the rules for how securities can be bought and sold without extensive registrations. This SEC paper provided a truly unprecedented opportunity for organizations like ACA to suggest improvements to regulations that impact angels and the startup companies we support. 

By: Pat Gouhin, Chief Executive Officer

I just returned from another trip to Washington, DC where I teamed up with our tax coalition partners; National Venture Capital Association (NVCA) , Biotechnology Innovation Organization (BIO) and Advanced Medical Technology Association (AdvaMed).  We conducted a series of congressional visits with key representatives from the tax writing Senate Committee on Finance and House Committee on Ways and Means. We also met with the Assistant to the President for Financial Policy on the National Economic Council.  This coalition, started by ACA over four years ago by Public Policy Chairman David Verrill, brings a consistent voice to US tax policy that impacts investors and entrepreneurs. It is managed by ACA’s consultants at GrayRobinson.