August 19, 2013
The one year ban on fundraising for any startup that fails to follow the filing procedures carefully would very surely kill any startup that files incorrectly. As a first-time founder, navigating the legal space surrounding startups is already tricky as is. This only adds to the confusion and places an additional penalty on top of the money and time already spent on legal fees. Yes, companies are cheaper to start than before, but they are by no means "cheap". The only beneficiaries of these tricky filing requirements I can foresee will be the lawyers that will capitalize on these requirements. Startups will only either try to avoid these legal fees by doing it themselves (which opens the possibility for incorrect filings the 1 year ban) or by handicapping themselves by paying exorbitant legal fees to file with the SEC correctly.