Abstract
Across the world, developed economies use roughly the same framework to regulate entrepreneurial ventures raising capital. The minor differences in how developed countries regulate securities for emerging businesses lie primarily in their legal thresholds for fundraising caps, disclosure requirements, and the criteria for accredited investors. This uniform regulatory framework persists despite significant empirical evidence that the citizens of developed countries vary widely in their desire to pursue entrepreneurial opportunities, their perceptions of the number and quality of entrepreneurial opportunities available to them, and their perceptions of their own ability to succeed in entrepreneurship. This Article advocates for a new approach to securities regulation in the developed world that seeks to tilt the balance between capital formation and investor protection in the direction that best represents the entrepreneurial goals and desires of the citizenry.
To date, legal scholars have written extensively about securities law reforms in the opposing directions of investor protection and capital formation for new ventures. Largely, these scholarly debates fall along partisan lines. This Article reframes the debate about striking the right balance between investor protection and capital formation by emphasizing that the citizenry being governed has opinions on how entrepreneurial activity and fundraising should function. This Article argues that those opinions should be an important factor in determining the securities regulations ultimately adopted in a given jurisdiction.
In developing the idea of “getting it just right,” this Article looks at various metrics across many developed countries, then focuses on three key metrics and three securities regulation schemes. The key metrics studied are: the securities laws in each jurisdiction, the feelings of the citizenry toward entrepreneurship, and expert opinions of each jurisdiction’s fundraising environment. In combining first-of-its-kind comparative securities law research with empirical data from a highly-respected longitudinal study in its twenty-fifth year, this Article makes a significant contribution to the existing literature by providing a new way to balance the competing concerns of investor protection and capital formation in a way that is flexible, dynamic, and removes partisan considerations from the equation.
Recommended Citation
David Nows,
Getting it Just Right: The Goldilocks Level of Securities Regulation,
26
Nev. L.J.
111
(2025).
Available at:
https://scholars.law.unlv.edu/nlj/vol26/iss1/4