Weekly Roundup: Still a Bill 📜

Happy Friday, DVC! And Happy Ides of March!

If like me your commute today involved getting a warning from your local Soothsayer to beware of betrayal, hopefully you just turned around and worked from home.

Good luck getting me through Slack DM’s, Brutus…

Startup Discussion & Weekly Poll:

If you saw the news about congressional bill H.R. 2799 this week, you know there’s a bright spot on the 2024 political horizon after all! Quite a few of you reached out asking what this could mean for us and the startup industry, so let’s dive into it!

The Background:

True to its name, the goal of the “Expanding Access to Capital Act of 2023” is to pass new rules making it easier for startups to access capital.

Some of the changes would remove rules on VCs that have restricted the number of investors and dollars a fund can accept (Cue: Me playing the world’s tiniest violin 👉️ 🎻 )

The more relevant part for us involves potentially changing the “Accredited Investor” definition to include any investor who:

1. Does not exceed 10% of their income or net worth on any one investment,

2. Signs a self-attestation that they understand the risks of investing in private offerings (i.e. startups), or;

3. Verifies they are receiving personalized investment advice from licensed financial professionals (Series 7, 65, or 82)

What are people saying?

Those in Favor:

While Laissez-Faire Superfans™️ might not think it goes far enough, it could be a gradual way to start bridging retail dollars into traditional VC. After all, the “Must not exceed 10% of your income/net worth” rule already exists in Reg A+ deals and could be a familiar way to cap investor risk.

And those against..

Some are arguing H.R. 2799’s proposed “Accredited Investor” definition is actually too lenient and could lead to misinformed investors losing money to dishonest founders, fund managers, or just bad luck. In other words, if you don’t know what you’re doing and make a bad investment, losing 10% of your net worth still hurts a lot.

Our thoughts:

As always, it’s nuanced and the truth’s probably somewhere in the middle. It’s interesting to note, though, that the bill doesn’t propose the route of an education-based path similar to a driver’s license exam. Which, if you’ll allow me a moment of self-promotion, is what we’re advocating for with our Qualified Accredited Investor (QAI) program 👀 

So what’s next?

After watching Schoolhouse Rock’s “I’m Just a Bill” 13 times today on repeat, I feel qualified to say H.R. 2799 will still need to get approval from 1) the Senate, and 2) the President before becoming a law.

Considering that the bill barely passed the Republican-held House, the Democrat-held Senate and White House may be a challenge. Plus, the fact that a similar bill (H.R. 2797) has not moved since passing Congress in June 2023 may not bode well for this one…

But, just like investing in startups, we’ll remain cautiously optimistic and hope for a good outcome! 🤞 

Last Week's Results:

Last week we asked you to share your general strategy for re-investing in portfolio companies… and 100% of you rationally answered “It depends!" 🤷 

The write-in submissions we received were so insightful that we’ve shared them here. It’s a Google Doc (very fancy…) that we’ll use to start crowdsourcing our community insights. So, keep responding and share your thoughts! 🙏 

Vote for New Deals:

Help select DVC's future deals! Please view the options, upvote your favorites, and suggest your own!

New companies suggested this week:

• L5 Automation, Minds 

Deal Review #77 Update:

In case you missed it, this week we’re looking at Sholder - a Boulder, Colorado-based startup providing peer-to-peer mental & emotional support for high-burnout employees.

We’ve reached out to Sholder’s team to request a live discussion with DVC, so stay tuned for more! In the meantime, join the discussion in Discord and submit your questions below:

DVC Portfolio Updates:

Overplay (Deal #55) - Good Evening, Sharks:

Gaming startup Overplay is making its “Shark Tank” debut tonight at 8pm ET on ABC! Here’s to hoping we’ll see Mr. Wonderful at the next Overplay shareholder meeting… See full update and tune in!

Miso Robotics (Deal #8) - New Round Inbound:

In a 1,400+ word email update with zero paragraph spaces, Miso Robotics’ CEO gave a comprehensive update on the company as it approaches a new funding round! Highlights include updates to the “Flippy” robot design and the pending opening of a new showroom restaurant in LA! See full update.

Thank you for reading & participating! Have a great weekend and see you for more DVC action next week!

Sincerely,

Team DVC