The US House of Representatives passed two bills on Tuesday 5th of July, aiming to make it easier for entrepreneurs to raise money and to improve conditions for SME and startup investing.
The “Supporting America's Innovators Act” (H.R. 4854) passed the House by a vote of 388 - 9, while the “Fix Crowdfunding Act” (H.R. 4855 ) passed the House by a vote of 394 - 4. Both are part of the Innovation Initiative which was launched by Congressman Patrick McHenry of North Carolina and Majority Leader Kevin McCarthy of California. Congressman Patrick McHenry was a vocal advocate for the JOBS Act initiative. The two bills now pass to the Senate where they should be voted again in order to become law.
H.R. 4854 included an exemption from the Investment Company Act by increasing the investor limitation for venture capital funds, from 100 to 250 persons.
H.R. 4855 relates to investment crowdfunding, made with the aim to fix the current perceived issues enacted on May 16 2016 under the Title III (Reg CF) of the JOBS Act.
The bill will permit the use of single purpose funds to participate in the sale and offer of crowdfunded securities. It will also clarify certain requirements under the Exchange Act 12(g), giving companies a longer period before having to comply with the pre-IPO documents required by the SEC.
“Today, the House passed two bills with strong bipartisan support that begin to confront this crisis, [...] Angel investing and investment crowdfunding are both innovative new forms of capital formation that—in the proper regulatory climate—can become vital tools for entrepreneurs and small businesses. My two bills help to ensure investment crowdfunding and angel investing reach their true potential.” added McHenry.
The news has been well-received by the vast majority of the actors in the market. Bobby Franklin, President and CEO of the National Venture Capital Association (NVCA) said: “We are pleased to see Congress focused on proposals to help startups access the capital they need to scale and hire new workers, which is critical for the entrepreneurial ecosystem and the American economy.”
We agree that’s another good step forward towards a more open and accessible capital market in the US and that Congressman McHenry continues to drive a visionary role since 2011 when he started working on investment crowdfunding regulations. Great progress have been made since and there is now a good foundation and multiple opportunities, to deliver more efficient and effective finance services for new audiences.
Read the whole article and find the text of both Acts at Crowd Valley News.
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