> I think this addresses the challenge of the general solicitation rule (finding the startups) without the negative of creating a bunch of unvetted startups advertising for dollars.
Not really. We, here on HN, tend to frame things around tech startups, but there's a larger world out there that incubators don't (and often can't) address. Consider this (real life) example:
Recently a local pub came up for sale. The asking price was $200,000. The purchase would include all current equipment and supplies, existing vendor contracts (subject to state transferability rules on the alcohol contracts), and local liquor license (the state license isn't transferable). It also included the building which housed 3 occupied (at the time) apartments.
The question, of course, is how to raise the $200K. Standard business loans were out (not an established business). There's SBA, but the loan amount we were looking for was a bit high for SBA. Friends and family, of course, but we wouldn't even come close.
In the end, we had to pass (though funding was only a part of the decision to pass). Here's kicker: If we could have spread the net wider, we may have had a chance to raise the money (with less effort), and been able to go ahead with the purchase.
While this is one story, I see these kinds of things al the time. A few years back, a founder looking to start a paintball facility got nailed by this (he was advertising the investment opportunity). It ended up shutting down the project.
The point is, outside of the technology world, getting investment funding for small businesses is very hard. This rule change makes it much easier.