House Small Business Subcommittee on Economic Growth, Tax and Capital Access today held a hearing to examine the current regulatory environment for equity finance and ways to strengthen the ecosystem. Equity financing is a funding method where a business owner sells a percentage of their company in exchange for an ownership stake.
"Because many start-up businesses do not have sufficient assets to pledge as collateral to secure a bank loan, equity finance is an important source of funding for them," said Rep. Mick Mulvaney (R-SC). "Equity finance provides not only growth capital, but also strategic partners who are invested in the business' success."
"In order to continue small business's historical role as the engine of our economy they must have access to capital; unfortunately, there have been regulatory barriers that have limited this access. In order to help small businesses gain access to the credit and capital they need to run their business successfully, Congress must adopt policies that support functional capital markets without imposing undue restrictions on providers of debt and equity capital."
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