President Obama Signs Senator Scott Brown's Crowdfunding Legislation Into Law

Press Release

U.S. Senator Scott Brown's (R-MA) bill to legalize crowdfunding was signed into law by President Obama today as part of the JOBS Act. Senator Brown was the first in the Senate to introduce crowdfunding legislation and, in March, teamed with Senator Jeff Merkley (D-OR) to author the CROWDFUND Act, a bipartisan compromise that was passed as an amendment to the JOBS Act.

"Crowdfunding is a game changer for startups and entrepreneurs in Massachusetts and across the country," said Senator Brown. "These small businesses now have a powerful new tool to grow and create jobs. And now every American, regardless of income level, is able to invest and get in on the ground floor of a great business idea. This bill has great potential for our economy and job growth. With continued bipartisanship, I believe we can pass more jobs legislation. Standing next to President Obama for the second bill signing in as many days is proof of what is possible when we work together."

Crowdfunding will boost job growth in Massachusetts and across the country by empowering new small businesses and aspiring entrepreneurs to bypass Wall Street and raise capital from a wide range of small dollar investors. It also levels the playing field by giving every investor the opportunity to buy an ownership stake in a new business. The crowdfunding legislation signed into law will:

Allow entrepreneurs to raise up to $1 million per year through an SEC-registered crowdfunding portal.

Free people to invest a percentage of their income. For investors with an income of less than $100,000, investments will be capped at the greater of $2,000 or 5% of income. For investors within an income of more than $100,000, investments will be capped at 10% up to $100,000.

Require crowdfunding portals to provide investor protection, including investor education materials on the risks associated with small issuers and illiquidity.

Timeline:

November 2, 2011: Senator Brown introduced legislation to legalize crowdfunding, the Democratizing Access to Capital Act (S. 1791).

November 30, 2011: WIRED published an op-ed by Senator Brown on the importance of crowdfunding for innovation and job growth.

December 1, 2011: Senator Brown testified at the Senate Banking Committee's first hearing on crowdfunding.

January 31, 2012: President Obama included crowdfunding legislation in his Startup America Legislative Agenda.

February 3, 2012: Senator Brown wrote President Obama asking for help in urging the Senate to act on crowdfunding legislation.

February 27, 2012: Senator Brown hosted a roundtable to discuss crowdfunding and access to capital with Massachusetts entrepreneurs and small businesses at Boston City Hall.

Boston Herald: Scott Brown leads forum on crowd-funding, venture capital

February 29, 2012: In a speech from the Senate floor, Senator Brown called on his colleagues to work together and pass his crowdfunding bill.

March 5, 2012: Senator Brown spoke about his crowdfunding legislation at a forum hosted by Wefunder.com, a website rallying grassroots support for crowdfunding, and MassChallenge, a not-for-profit organization dedicated to supporting the work of entrepreneurs.

Boston Business Journal: Scott Brown: Crowdfunding for startups would mean economic stimulus

BostonInno: Scott Brown: Startups can "Blow the Doors Off" the Economy

March 6, 2012: The Senate Banking Committee held its second hearing on crowdfunding where Cambridge Innovation Center founder and CEO Tim Rowe testified about the importance of crowdfunding legislation.

March 8, 2012: The U.S. House passed the Jumpstart Our Business Startups (JOBS) Act by a vote of 390-23 and included crowdfunding legislation.

March 13, 2012: Senators Scott Brown and Jeff Merkley introduced bipartisan compromise legislation called the CROWDFUND Act (S. 2190).

March 22, 2012: The Senate passed the Brown-Merkley CROWDFUND Act as an amendment to the JOBS Act, which was approved by a vote of 73-26.

March 27, 2012: The House accepted the Brown-Merkley crowdfunding language and passed the JOBS Act by a vote of 380-41.

April 5, 2012: President Obama signed the CROWDFUND Act into law as part of the JOBS Act.

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