Congressman Patrick McHenry echoed President Obama's comments today, insisting that the United States Senate pass crowdfunding legislation to free up capital for entrepreneurs. Crowdfunding allows everyday investors the opportunity to support intriguing startups and small businesses, providing much-needed capital for economic growth and job creation.
The proposal represents a point of agreement between Republicans and the White House regarding regulatory reform to ease costly burdens on small businesses.
"There's one bill that has been written, amended, and passed with bipartisan support," said Congressman McHenry. "The Senate can pass H.R. 2930 and have it on the President's desk today."
The Entrepreneur Access to Capital Act, which was introduced by Congressman Patrick McHenry (R-NC) and passed 407-17 with broad, bipartisan support in the House of Representatives, has been awaiting action by the Senate Banking Committee.
H.R. 2930 provides a crowdfunding exemption to SEC registration requirements for firms raising up to $2 million, with individual investments limited to $10,000 or 10 percent of an investor's income. The legislation also erases limits on the number of investors that can participate in crowdfunding, extending investment opportunities to everyday investors that are currently not an option under SEC regulation.
Specifically the bill will do the following:
- Create a crowdfunding exemption from SEC regulations for firms raising $2 million, with a financial audit requirement for any amount over $1 million.
- Individual investments limited to $10,000 or 10 percent of an investor's annual income.
- Excludes crowdfunding investors from counting as shareholders for purposes of calculating the 499-shareholder cap under 12(g) of the Securities Exchange Act.
- Preempt state law and exempts the ban on general solicitation for the new crowdfunding exemption.
- Preserves states authority to monitor and fight fraud.