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Start-up Investing is Alive and Well Despite the Pandemic

Start-up Investing is Alive and Well Despite the Pandemic

Author: Dan BrecherDate: September 7, 2020

While the COVID-19 pandemic has made capital formation more challenging for start-ups, the situation isn’t nearly as dire as one SEC Commissioner suggests. As we have seen firsthand, many entrepreneurs and startups are successfully funding and growing their businesses.

Last month, Commissioner Hester Peirce of the U.S. Securities and Exchange Commission (SEC), delivered a lovely paean to an 18th Century founding father of modern Japan in a speech she gave to the Institute for Excellence in Corporate Governance at its 18th Annual Corporate Governance Conference.  But in what I view as a misguided portion of her otherwise scholarly presentation on Japanese economic history,  Peirce criticized America’s regulatory system for startup and early-stage corporate fundings, claiming there are "intricately thick regulatory barriers" that make it difficult for entrepreneurs and start-ups to raise capital.  Among other views with which I disagree below, Peirce stated "Regulatory barriers are surmountable by the wealthy, well-connected and entrenched, but the people who could benefit the most by joining forces with friends and neighbors to build a profit-making enterprise that serves their communities have a much more difficult time."

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