http://www.rule506.com/angels.htm
"Angels on the Internet: The Elusive Promise of "Technological
Disintermediation" for Unregistered Offerings of Securities
by Donald C.
Langevoort*
*Lee S. & Charles A. Speir Professor of Law, Vanderbilt
University. The author would like to thank Bob Hillman and the various
participants at the
Lewis & Clark Law Forum, Financing Innovation: The Future of
Capital Formation for Small and Emerging Businesses, for useful
comments.
This Article considers the extent to which Internet-based
technology can allow issuers to search for "angels"--sophisticated
individual
investors willing to invest in start-up enterprises. After
considering the evolution of Securities and Exchange Commission (SEC)
policy
under Regulation D regarding the general solicitation ban, which
limits the extent to which issuers may actively search for potential
investors, it suggests that broad-based capital raising through
Regulation D offerings may well be both technologically and
administratively feasible. But is it also economically or
socially feasible? This Article considers both what we know and what we
do not
know about this type of capital raising, and makes some
suggestions for administrative reform to accommodate continuing efforts
to
lower the cost of entrepreneurial capital. "
[full text of article available at link]
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