28 thoughts on “An Angel Killer”

  1. The “do gooders” in Washington haven’t a clue while they are relentless in their pursuit of “improving” this country. They’ll continue to milk the private sector until it bleeds, and then they’ll double down and continue to milk it even further until it’s dead.

  2. That first paragraph is embarrassing beyond belief. Tumlinson just detonated any ounce of credibility he ever had about anything. This goes beyond a tingling up the leg. Tumlinson’s whole body is vibrating like a tuning fork.

  3. I really dislike the concept of an “accredited investor”.From Wikipedia:

    At an open meeting on December 13, 2006, the U.S. Securities and Exchange Commission (SEC) voted to propose a change to the definition of “accredited investor” that, if adopted, would apply to offers and sales of securities issued by hedge funds and other private investment pools to “accredited natural persons”.[citation needed] The proposal requires “accredited natural person” to be both “accredited investors” under the existing standards and own not less than $2.5 million in investments (as currently defined in the Investment Company Act for purposes of the Section 3(c)(7) exemption) on the date an investment is made. The $2.5 million test will be periodically adjusted for inflation.

    The SEC release estimates that the accredited natural person definition, if adopted as proposed, would significantly reduce the number of U.S. households that are eligible to invest in private investment vehicles. By the SEC Staff’s calculation, as of 2003 approximately 8.47% of U.S. households qualified for accredited investor status under Regulation D.[2] The Staff estimates that this percentage would drop to approximately 1.3% with respect to investments in private investment vehicles if the accredited natural person standard is adopted.[citation needed]

    Here’s the report, that came from:

    We have specified $2.5 million for the amount of investments that a person would be required to own under the proposed definition. As proposed, this dollar amount would be adjusted for inflation on April 1, 2012, and every five years thereafter, to reflect any changes in the value of the Personal Consumption Expenditures Chain-Type Price Index (or any successor index thereto), as published by the Department of Commerce, from December 31, 2006.58 OEA estimates that approximately 1.3% of United States households would qualify for accredited [57] OEA estimated these levels using the Personal Consumption Expenditures Chain-Type Price Index, as published by the Department of Commerce, available at http://www.bea.gov. [58] Each adjustment would be rounded to the nearest multiple of $100,000. We have selected the above-referenced index following discussions with the Federal Reserve Bank and our conclusion that that index is a widely used and broad indicator of inflation in the U.S. economy. [24]

    natural person status based on owning $2.5 million in investments.[59] It estimates that in 1982, when Regulation D was adopted, approximately 1.87% of U.S. households qualified for accredited investor status. It further estimates that by 2003 that percentage increased by 350% to approximately 8.47% of households. By incorporating the proposed requirement for $2.5 million of investments owned by the natural person at the time of purchase, that percentage would decrease to 1.3% of households that would qualify for accredited natural person status,

    So the idea is to restrict the opportunity to invest in such things to a bit over 1% of the households in the US. I’m curious why we should exclude roughly 7% of the US’s households because they only have a net worth of between $1 and $2.5 million dollars?

    The concept of an accredited investor is one of those holdovers from the FDR era. I think we should just junk the concept and the obstruction rather than make it worse by institutionalizing a sort of elitism.

  4. Gahh!! I read the 1st paragraph! I’m about to blow chunks!

    I guess if you’re going to write hagiography to one, you need a suitable villian for the other. Dodd fits this bill to a T. He helps cause the housing crisis and now wants to kill entrepreneurship. We’d be better off if he would concentrate on lining his own pockets and leave the rest of us alone.

  5. That first paragraph just insured I will never do any business with Mr Tumlinson, or ever respect a single thing he ever says about anything.

  6. Just as the Hawley-Smoot Tariff turned the crash of 1929 into the Great Depression, this bill, if passed, will turn the current recession into the Second Great Depression. I guess Obama wants to be the new FDR so badly he’ll even manufacture the depression he needs to be one.

  7. Timothy “Taxes? What Taxes?” Geithner proposed draconian regulations on venture capitalists early in his reign. This shifts the aim point to start-ups themselves, with the certainty of even more devastating consequences. Going through a Reg-D offering is painful enough (though when I did it there was no overriding federal mandate — one had to “blue sky” the offering in every state individually). This new bill makes angel investment equivalent to an IPO.

    Doing a registered stock offering 15 years ago was a $100,000 undertaking if one went cheap. And one had to already have a business up and running (though in the internet world, it didn’t have to have either revenue history or any revenue potential…). After inflation, this is probably a $140,000 proposition today. So one has to have $140,000 just to seek initial start-up seed money? There will be no new business creation, unless it is done illegally.

    I await Jim’s proof that this will not only increase business start-ups, but lower the deficit…

  8. Some seem confident these new “angel killer” provisions will be removed from the bill.

    http://www.baerbizlaw.com/category/blog/guarding-the-angels/

    No one has a clear idea exactly how these provisions got into the financial reform bill, the ostensible purpose of which is to address the root causes of the financial collapse of 2008. While these causes are undoubtedly complex, I can safely say that angels run amok is not among them. From conversations with Senator Dodd’s staff, the best that inquirers have been able to discern is that the provisions were intended to deal with Bernie Madoff-type situations and hedge fund abuses. No one appears to have seriously considered the implications for angel investors and startups. Of course, this is an expected problem when, in the name of reform-at-any-cost, you ram through sweeping regulatory overhauls whose drafts consume legions of trees and no has the time to peruse in depth.

    Fortunately, the entrepreneurial and angel community, especially the Angel Capital Association, was very much on the ball here, and, as we speak, their representatives are working with Senator Dodd and Senator Richard Shelby (R-Ala.) to make fixes. Hopefully we will have some good news to report on this blog soon.

  9. FWIW I think a deeper recession is nearly unavoidable. Governments everywhere around the globe keep trying to inflate a punctured tire. The more they try to wrongly stimulate the economy the worse it will be.

    However all the bill measures mentioned in this article are plainly insane. If anything we need to speed up the new enterprise creation cycle during these times, not make it slower.

  10. Thanks Bill. That does sound promising.

    Paul said: “That first paragraph just insured I will never do any business with Mr Tumlinson”

    You’re entitled, but, if you’ll pardon the expression, that seems like a unreasonable way to get to space! Roughly half the USA votes for Democrats — if you looked into it and you wanted to be consistent, you might be surprised by who you would be refusing to do business with. Denying Tumlinson your business won’t make one iota of difference in determining whether the Democrats are in power, but it could hurt your ability to get into space.

  12. The vast Majority of the Democratics are not in the producing things sector, but in the services or governemnt sector. I’ve never met a
    single person that actually runs a “builds things” company that had the democrat view of the world. I’ve met some service providers, and I’ve met a lot that did not like the republicans, but none that bought the socialist cool aid. Mr Tumlinson is involved with trying to start a producing things business,(His space suit business) the first paragraph says he has ZERO contact with reality when it comes to the reality of building a business.

  13. I don’t talk politics with most of my suppliers, but I know my plastic injection molding guy is a Democrat (and has run for local office) and my die-cutting guy definitely has a “democrat view of the world”, although it wouldn’t surprise me if he doesn’t vote. Both are hands-on small businessmen.

    But moreover, campaign contributions are public. You can type well-known names into contribution search engines and see who they contributed to. For example, you can type in William Gates (a guy who produces things, no?) and see all the democratic politicians he has supported. (Are you going to stop using microsoft products now?) Anyway, try it for yourself – you might be surprised.

    And seriously, best of luck with Unreasonable Rocket!!!

  14. Tumlinson may have felt he needed to perform this bit of literary fellatio in order for his criticisms not to be brushed off by the Administration, but when he gets back on his feet, the mud on his knees and the … on his face will still be there.

  15. We’re already in the early stages of a depression, and this is just one of hundreds of banana peels Uncle has strewn about his path. I just hope that commercial space entrepeneurs can survive the next 10 years of extremely limited funding. I take encouragement that while many businesses were destroyed in the 1930’s, there were still some notable exceptions like IBM.

  17. I hope this passes and does all the harm it’s expected to-how else can these people learn?

  18. I hope this passes and does all the harm it’s expected to-how else can these people learn?

    “Learn”? Sounds like an evil industrial process we must ban.

  19. Bob, please point out the word Democrat in Paul’s post. I think he was pretty specific. I would question the sense of someone writing such hagiography too. I read it again and now I need a shower.

  20. Bill, Your point is well made, but I think Paul’s second post indicates that I was on the right track. I greatly respect Paul’s rocket accomplishments, I don’t want to pick a fight with him or about him, and I just as soon drop it.

    Anyway, I’m finding the contribution search engine approach interesting. If various alt.space entrepeneurs were named “John Smith”, it woudl be difficult, but many of them have unusual names amenable to search. Unsurprisingly, I’m seeing a pattern of contribution that is not ideologically rigid, but there are ideological patterns nonetheless. By the way, I just saw Dean Kamen on the Colbert show — what a big hearted guy — full of empathy – any guesses about which way he leans politically?

  22. Bob-1 said:

    (Are you going to stop using microsoft products now?)

    Yes.

    [hald@medusa ~]$ cat /etc/system-release
    Fedora release 12 (Constantine)
    [hald@medusa ~]$

  23. Hal, is the upgrade from Fedora 11 to 12 worthwhile? I read that it reduces the number of work spaces from four to two, but presumably that can be fixed?

  24. Rand, I tend to upgrade as a matter of course even when it’s not necessary. These are all home machines that I don’t use for any “real work”, so I’m probably not the best person to evaluate worthwhile.

    The number of workspaces is changed by right clicking, and changing the number of workspaces and/or rows in preferences.

    I do know that my P-233 MMX is too old to support F12, and is orphaned on F11, but I suspect most people are no longer running anything that old.

  25. Hal,
    The last time I ran something that old (a P133 actually) was a while back when I set one up as a Mandrake (7.0) box for a Unix class. Took the worst system I could find in the garage and slapped that OS on it, worked like a charm.

  26. Chris L.,
    Yeah, I need to get my P133 “router” going again. I botched LILO on the a Slackware update months ago and repairs necessitate installing the HD in another machine as a secondary drive. I was in a hurry, so I just replaced it with my wireless router and haven’t bothered to get fix it. It was my “you’re running the latest slack release on THAT?” machine. It’s a P133 with 16MB RAM and a 400MB HD. As I recall it would not run the latest kernel, but I was able to keep everything else current.

  27. Hal,
    Sounds like the one I had, it was an old Compaq Presario someone gave to me for spare parts. The OS was also a gift, so the system cost me nothing but time.

  28. I’ve never met a single person that actually runs a “builds things” company that had the democrat view of the world.

    I’m one.

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