Professor Abe Cable joined the UC Hastings faculty in 2011. He graduated from the University of Puget Sound, BA History (1997), and Harvard Law School in 2000, where he served as an editor and member of the articles committee on the Harvard Law Review. Prior to joining the faculty at UC Hastings, he was a partner at Miller Nash LLP, in Portland, Oregon. In ten years of practice he worked on a broad range of matters, including private and public offerings of securities, angel and venture capital investments, sale of subprime mortgage-backed securities, and negotiation of software licenses. He has been a visiting professor at Berkeley Law and an adjunct professor at Willamette University College of Law and University of Oregon School of Law.
Areas of Expertise (7)
Harvard Law School: J.D., Law 2000
University of Puget Sound: B.A., History 1997
Selected Articles (4)
Currently, regulations try to limit unregistered sales of stock (private placements) to the “smart money,” either by informing investors through disclosure or excluding unsophisticated investors from the market. In theory, these smart-money approaches promote the dual goals of capital formation and investor protection. But in practice, regulators have struggled to craft effective disclosure or screening mechanisms. In light of these failures, this Article advocates for a new approach — investment caps that allow every investor a limited amount of “mad money” to invest in risky private placements. This mad-money approach can protect investors by encouraging basic diversification and liquidity, while advancing capital formation at least as well as alternatives.
Startup lawyering is a distinctive style of law practice first observed in Silicon Valley decades ago. Like other business lawyers, startup lawyers form entities, protect intellectual property rights, and document financing transactions for clients starting new businesses. But startup lawyers also encourage entrepreneurship more broadly by promoting Silicon Valley’s practices and conventions, such as standard contract terms that streamline negotiations with venture capital investors. Today, startup lawyers practice not only in established entrepreneurial centers such as Silicon Valley or Boston, but also in the shadow of economic development efforts to promote entrepreneurship. In this new context, startup lawyering is susceptible to both positive and negative assessments: as productive and professionally satisfying civic engagement or as wasteful rent seeking. Based on the author’s personal experiences and the academic literature, this essay identifies circumstances that support the more favorable view.
Venture development funds ("VDFs") are products of state and local government law that use public funds to invest in local start-ups, in the hope that these companies will then attract venture capital investment. Existing analysis by legal scholars largely assumes that establishing a private venture capital market is essential to encouraging entrepreneurship. This article challenges that assumption. It argues that VDFs and other policies focused on encouraging venture capital are outmoded and inconsistent with the ultimate economic development goals of state and local governments. In many industries, entrepreneurs can now get by with less capital because the cost of developing a product is rapidly declining due to technological advances (e.g., butt computing) and other developments (e.g., the ability to market an app through Apple’s App Store). But venture capital funds continue to seek out investments in a small number of industries that still require a great deal of capital, such as biotech firms trying to develop new drugs. This narrow focus is inconsistent with the advice of economic development experts to pursue industry-neutral policies that broadly encourage entrepreneurial activity in all of its forms. Also, policies oriented towards venture capital may undermine goals of employment diversity and stability because companies seeking venture capital pursue particularly high-risk business strategies that often fail. This article recommends that state and local governments shift their policies to encourage, or at least not hinder, alternatives to venture capital.
Angel investors are an increasingly important source of funding for high-growth startup companies. These investors often organize into groups to invest more efficiently. Recently, the regulatory status of these groups has been questioned. This article argues that angel groups do not violate securities laws because their investor-led nature distinguishes them from regulated securities professionals and makes them similar to investor forums that operate under Securities and Exchange Commission no-action letters. More broadly, it argues that the current framework of private placement regulation adapts poorly to a changing market for startup company finance. It concludes with a reform proposal to clarify the regulatory status of angel groups and future innovations in startup company finance.