We’re already acting on the ideas that are part of A Better Way. Today, for instance, the House is taking up two bills to help startups raise capital when they need it most.
Both authored by Chief Deputy Whip Patrick McHenry (R-NC), these initiatives update SEC rules to make it easier for startups to attract a broader and deeper pool of investors. Here’s what they do:
- H.R. 4854, the Supporting America’s Innovators Act. The way it works now, the securities laws arbitrarily cap the number of investors acting as a coordinated group. In testimony before the Financial Services Committee, Kevin Laws, COO of AngelList, said that “the limit of 99 investors now acts as a brake on the amount of sophisticated capital that is flowing into companies.” This needlessly excludes investors and reduces the amount startups can raise. Instead of sticking with rules set in 1940, this bill lifts the cap so that startups can raise more resources from more angel investors.
- H.R. 4855, the Fix Crowdfunding Act. This bill helps make crowdfunding less costly and more convenient for small businesses. In a letter of support, the Competitive Enterprise Institute noted that “American middle-class investors shouldn't be denied this kind of opportunity to build wealth because of unduly restrictive rules, and the commonsense approach of the Fix Crowdfunding Act will help see that they won't.”
Here’s what Rep. McHenry said after these bills were approved by the Financial Services Committee:
“Today, small businesses--particularly those in rural America—face immense challenges raising capital as traditional lenders have greatly reduced small business lending. To confront this challenge, we must harness technology and encourage innovative forms of capital formation to fill the void.”
Learn more at better.gop.