Who Can’t Raise Capital? The Scylla and Charybdis of Capital Formation

Authors

James D. Cox, Duke Law SchoolFollow

Document Type

Article

Publication Date

2014

Keywords

capital formation, blue sky law, intermediation, regulation, Securities and Exchange Commission, SEC, exemptions, investors

Abstract

There has long been complaints that the heavy regulatory hand of Blue Sky Law administrators prevents capital formation by small issuers. Using data recently collected by the SEC, the article reasons that the problems capital starved small issuers encounter is not the state regulator. The problems are elsewhere. The paper explores whether intermediation may ultimately enable more startups to raise needed funds. For this to occur, however, the paper explores the formidable obstacles the broker must overcome in meeting demanding suitability requirements.

Citation

James D. Cox, Who Can’t Raise Capital? The Scylla and Charybdis of Capital Formation, 102 Kentucky Law Journal 1-16 (2014)