The Angel Capital Association, a group which represents angel investors, says this week that the changes in the final rules banning "general solicitation" of companies seeking investments from accredited investors, could "kill most angel investment in the country." Those rules--which had been hailed as making it easier for companies to raise capital from investors--apparently include rules to verify the accredited status of investors in companies. Current rules only require angel investors to "self certify" that they meet accredited investment guidelines. The ACA said the new SEC rules require either pay stubs for the two most recent years for an angel, or review of IRS forms that report income (include a W-2, 1099, or 1040)--which it says its angels would be unwilling to provide. The ACA's Southern California members include the Tech Coast Angels, the Pasadena Angels, and the Keiretsu Forum.
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