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In a prepared statement that offered the senators an overview of the structure and dynamics of venture capital investing, Loy said: Our asset class is unique in many ways, with a critical distinction being that while the companies we have funded have had a proven and profound positive impact on the U.S. economy in terms of job creation and innovation, our specific asset class remains a small cottage industry that poses little, if any, risk to the overall financial system. With $40 million under management, Flywheel Ventures would have to register with the SEC under a bill proposed by Sen. Jack Reed, D-R.I., chairman of the committee, which would require funds to register if they have at least $30 million in assets under management.
To comply with the Rule 506 safe harbor, most venture capital funds file a Form D disclosure document with the SEC during or shortly after their offering has commenced. Form D requires disclosure of significant information about the private offering. ... We strongly believe that the government's need to understand the venture industry's financial commitments can be met with current disclosure. Venture capital played no role in the recent financial meltdown and does not have the fundamental investing principles to cause a future financial system failure. By requiring the venture industry to comply with the requirements of the Advisers Act, Congress would be unnecessarily weighing down an asset class that should be focused on building companies and creating jobs, rather than re-directing our resources and time toward administrative functions that our investors did not request and that do not help the entrepreneurs that we fund to create valuable businesses and the jobs that follow. Flywheel Ventures is based in Santa Fe, N.M., with offices in Albuquerque, N.M., and San Francisco. Founded in 2002, the firm invests in seed and early-stage companies in digital services, physical infrastructure, energy and water, primarily ones located in the Southwest and Rocky Mountain regions. Flywheel has a staff of seven with approximately $40 million under management in three active funds. Recent investments include MIOX Corp., which has developed a water treatment process, and Tred Displays, which makes digital signs that use batteries or solar cell energy, thereby cutting their power consumption. Both are based in Albuquerque. - Mary Kathleen Flynn.
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The Senate Banking Subcommittee on Securities, Insurance and Investment got a tutorial on venture capital earlier this week, when Trevor Loy, a board member of the National Venture Capital Association and the 
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