This morning, Congressman Bill Huizenga (MI-02) spoke on the House floor in support of H.R. 1219, the Supporting America’s Innovators Act of 2017. This legislation would allow small businesses and startups more flexibility in raising capital so they can continue to grow and hire more employees. H.R. 1219 passed with overwhelming bipartisan support by a vote of 417-3.
Rep. Huizenga's remarks:
Small businesses and entrepreneurs are the heartbeat of the American economy and access to financial capital is vital for entrepreneurs seeking to start up, operate, or expand businesses. However, gaining access to capital has remained an enduring challenge for many small businesses. … In order to succeed, these companies need capital and credit - the life-blood for growth, expansion, and job creation. Yet, the government continues to construct arbitrary walls that cut them off from essential financing as smaller companies are caught in a sea of regulatory red tape created by Washington bureaucrats.
Congress has made strides in tailoring the regulatory environment for smaller companies– most notably when we passed with strong bipartisan support the Jumpstart Our Business Startups – or JOBS Act – in 2012. The JOBS Act’s benefits are notable as more and more companies use its provisions to raise investment capital in both the public and private markets The JOBS Act raised the cap on investors in a privately-held company from 500 to 2,000 investors, but the limit on the number of investors acting as a coordinated group to invest in a company remained at 100, where it has been since 1940, some 77 years ago.
As noted by Kevin Laws of AngelList in his written testimony before the Capital Markets Subcommittee, “with online fundraising and general solicitation becoming more common because of the JOBS Act, companies are bumping up against the limit more frequently. The [current] limit . . . now acts as a brake on the amount of money the company wanted to raise, leaving tens of millions of dollars on the table that did not go into startups.”
H.R. 1219, the Supporting America’s Innovators Act, a bipartisan bill introduced by Reps. Patrick McHenry and Nydia Velazquez, would amend the cap currently contained in the Investment Company Act to allow 250 investors for a “qualified venture capital fund” and therefore enhance angel investors’ ability to provide important funding to small businesses. This bill is a very modest increase to the current exemption that has been in place for nearly 77 years. Modernizing this cap is long overdue to reflect today’s capital markets, and the increasingly important role that angel investors play as they commit the funds necessary to help small businesses grow.
The Securities and Exchange Committee (SEC) continues to ignore the backlog of good ideas to spur capital formation recommended by entrepreneurs, small businesses, and market participants at the SEC’s annual government-business forum on capital formation. In the SEC’s absence, Congress must act to promote market efficiency and capital formation. I think that we can all agree that we support smart regulation that protects investors and maintains orderly and efficient markets. But outdated, excessive, and unnecessary regulation whose costs outweigh benefits is dumb regulation that overly burdens smaller companies. Let’s provide some regulatory relief by enacting this bipartisan bill that will ease the burdens on small businesses and job creators to help foster capital formation and get Americans back to work.
Recently, I had the opportunity to welcome Michigan WWII Veterans to the memorial built in their honor. It was incredible to hear the stories of these brave men who fought to preserve freedom. Thank you for your service and thank you to the volunteers who made the veterans' trip such a positive and moving experience.
This afternoon, I welcomed nearly 40 people from around the world as they became American citizens at the Loutit District Library in Grand Haven. Congratulations to each and every one of you on making this life changing decision!