Parsing the Political Debate on Dodd-Frank
The long-term impact of Dodd-Frank on the financial system remains unclear, but its intention is to scrutinize large banks more rigorously and to create a credible threat of liquidation rather than, as critics contend, to institutionalize TBTF and to make small banks less competitive.
Regardless, the Dodd-Frank debate does add credence to the notion that even healthy businesses can benefit from access to alternative sources of capital, including equity-based crowdfunding. Financial turmoil and government regulation can have uncertain impacts on the traditional capital markets; funding diversification is, therefore, a prudent strategy for small businesses.
This article was written by an independent contributor, separate from TheStreet's regular news coverage.