In a letter to the U.S. Senate today, SBE Council President & CEO Karen Kerrigan urged Senators to support the JOBS Act (H.R. 3606), which passed the House with wide bipartisan support and could be voted on by the full Senate today.
Here is the text of the letter:
March 15, 2012
Dear Senator:
On behalf of the Small Business & Entrepreneurship Council (SBE Council) and our more than 100,000 members nationwide, I am writing to urge your support of the Jumpstart our Business Startups (JOBS) Act, H.R. 3606. The JOBS Act offers powerful reforms that will help small businesses at various stages of growth and development. The common sense reforms that are included in H.R. 3606 will provide regulatory flexibility and relief, and will promote and unleash new sources of funding for capital-starved small businesses.
The JOBS Act is critical to our members and our nation’s small business owners and entrepreneurs. Small business owners and entrepreneurs continue to lack the capital they need to hire, invest and grow. Capital formation is central to a dynamic and healthy entrepreneurial sector. Without adequate sources of capital, the economy will continue to underperform, and the recovery will remain less than robust. Healthy entrepreneurship requires access to capital, yet funding streams remain cautious, locked or tentative. Entrepreneurs need solutions that will create options for accessing capital. The JOBS Act offers such solutions, while protecting investors.
The crowdfunding piece of H.R. 3606 will enable new platforms for raising capital. The platforms will protect investors by utilizing proven technologies, sensible regulation and tapping into ‘the sunshine’ of social media. On these transparent platforms, investors will dynamically engage with other investors to vet business ideas and fund those businesses with significant promise. Crowdfund investing will allow entrepreneurs who lack access to funding networks the opportunity to bring their business ideas directly to investors. Americans will have the opportunity to invest in small businesses in their local communities, or support entrepreneurs in rural or urban areas where business formation is critical to sustaining those communities.
This is what has made gift-based crowdfunding so successful, and why crowdfund investing has been a major success in other parts of the world. The crowdfunding piece of the JOBS Act, along with the sensible changes made to Reg D, are two powerful provisions that will produce significant benefits for the broader small business community.
Other regulatory reforms in the JOBS Act are important for helping small firms access and accelerate their growth in the public markets. By creating a new category of issuers -- the “Emerging Growth Company” (EGC) – which phases in certain regulations over a five year period (or until a firm exceeds $1 billion in annual gross revenues), small firms will have the opportunity to scale up more efficiently while providing investors and regulators with critical information.
The JOBS Act will also make it easier for a small business to go public by increasing the offering threshold from $5 million to $50 million. In addition, the bill raises the outdated shareholder registration requirement threshold from 500 to 1,000 shareholders. Originally adopted in 1964 and not altered since, this threshold rule restricts company growth as firms need flexibility in a competitive global marketplace to develop. Finally, the JOBS Act increases the number of shareholders that can invest in a community bank (from 500 to 2,000). This common sense change will allow these critical institutions to better compete, and serve small businesses.
The small business community is very excited about this bipartisan legislative package that directly addresses a central challenge – access to capital. Unfortunately, the naysayers who are spreading a message of “fear” and “fraud” lack an understanding about the modern economy and how innovative technologies are transforming practices and tools that protect consumers and investors. Our outdated laws must be reformed to reflect this reality and provide U.S. entrepreneurs an opportunity to succeed in the competitive global marketplace.
Thank you, in advance, for your support of America’s small business owners and entrepreneurs.
Sincerely,
Karen Kerrigan
President & CEO
Showing posts with label crowdfunding legislation. Show all posts
Showing posts with label crowdfunding legislation. Show all posts
Small Business Groups Urge U.S. Senate Leaders to Advance Crowdfunding Legislation
A coalition of the nation's most influential organizations representing small business owners and entrepreneurs is urging U.S. Senate leaders to work together to bring crowdfund investing legislation to the Senate floor for a vote. In a letter addressed to Senate Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY), the groups note that crowdfund investing legislation passed the U.S. House 407-17, and President Barack Obama has expressed his support for the legislation through a Statement of Administration Policy as well as in his Startup Legislative agenda recently delivered to Capitol Hill.
(READ THE LETTER BY CLICKING HERE.)
Crowdfund investing platforms will allow entrepreneurs who lack access to funding networks the opportunity to bring their business ideas directly to investors through regulated, online platforms. As the groups note in the letter, "Americans will have the opportunity to invest in small businesses in their local communities, or support entrepreneurs in rural areas where business formation is critical to sustaining those communities." The letter points out that capital access remains a serious challenge for startups and growth-oriented businesses, and without "adequate sources of capital, the economy will continue to underperform, and the recovery will remain less than robust." Funding streams "remain cautious, locked or tentative," write the groups.
Two crowdfund investing bills have been introduced in the U.S. Senate. Majority Leader Reid announced yesterday that the U.S. Senate will address the package of capital formation bills that overwhelmingly passed the U.S. House. With respect to crowdfund investing legislation, state regulators have engaged in a campaign of "fear and fraud," which has deprived Senators from learning the facts about how crowdfunding currently works through gift-based platforms, and how technology -- and a new regulatory framework - will play a central role in rooting out potentially bad actors on crowdfund investing platforms.
As the groups note in their letter:
"On these platforms, investors will dynamically engage with other investors to vet business ideas and fund those businesses that have significant promise. Crowdfund investing platforms will be open and transparent, and operate under a new regulatory framework. The platforms will protect investors by utilizing proven technologies and tap into 'the sunshine' of social media. This is what has made gift-based crowdfunding so successful, and why crowdfund investing has been a major success in other parts of the world. Entrepreneurs looking to raise capital will be required to provide significant financial information to potential investors, as well as withstand the scrutiny of the crowd in regards to the feasibility of their business plans and models."
The small business groups are optimistic about the legislation's fate. In the letter, they communicate a belief that "a consensus is achievable for advancing legislation that enables effective crowdfund investing platforms for small businesses while protecting investors." Majority Leader Reid said the Senate Banking Committee will hold an additional hearing on the package of capital access bills next week, which the groups hope will include expert witnesses on crowdfunding so that Senators can be properly informed about existing platforms, and how the new space will protect investors.
The groups underscore the importance of the need to work together to enact solutions that will help small business owners invest, grow and create jobs "Capital is the lifeblood of our economy, and without it small business owners and entrepreneurs simply cannot generate the new jobs, breakthrough innovations and economic impact that are necessary for bringing our nation back to sustained growth," the groups conclude in the letter.
The letter was signed by Harry Alford, President & CEO, National Black Chamber of Commerce; Kristie Arslan, President & CEO, National Association for the Self-Employed; Roger Campos, President & CEO, Minority Business Roundtable; Allen Gutierrez, National Executive Director, The Latino Coalition; Barbara Kasoff, President & CEO, Women Impacting Public Policy (WIPP); Karen Kerrigan, President & CEO, Small Business & Entrepreneurship Council; and Todd McCracken, President, National Small Business Association.
Karen Kerrigan, President & CEO
(READ THE LETTER BY CLICKING HERE.)
Crowdfund investing platforms will allow entrepreneurs who lack access to funding networks the opportunity to bring their business ideas directly to investors through regulated, online platforms. As the groups note in the letter, "Americans will have the opportunity to invest in small businesses in their local communities, or support entrepreneurs in rural areas where business formation is critical to sustaining those communities." The letter points out that capital access remains a serious challenge for startups and growth-oriented businesses, and without "adequate sources of capital, the economy will continue to underperform, and the recovery will remain less than robust." Funding streams "remain cautious, locked or tentative," write the groups.
Two crowdfund investing bills have been introduced in the U.S. Senate. Majority Leader Reid announced yesterday that the U.S. Senate will address the package of capital formation bills that overwhelmingly passed the U.S. House. With respect to crowdfund investing legislation, state regulators have engaged in a campaign of "fear and fraud," which has deprived Senators from learning the facts about how crowdfunding currently works through gift-based platforms, and how technology -- and a new regulatory framework - will play a central role in rooting out potentially bad actors on crowdfund investing platforms.
As the groups note in their letter:
"On these platforms, investors will dynamically engage with other investors to vet business ideas and fund those businesses that have significant promise. Crowdfund investing platforms will be open and transparent, and operate under a new regulatory framework. The platforms will protect investors by utilizing proven technologies and tap into 'the sunshine' of social media. This is what has made gift-based crowdfunding so successful, and why crowdfund investing has been a major success in other parts of the world. Entrepreneurs looking to raise capital will be required to provide significant financial information to potential investors, as well as withstand the scrutiny of the crowd in regards to the feasibility of their business plans and models."
The small business groups are optimistic about the legislation's fate. In the letter, they communicate a belief that "a consensus is achievable for advancing legislation that enables effective crowdfund investing platforms for small businesses while protecting investors." Majority Leader Reid said the Senate Banking Committee will hold an additional hearing on the package of capital access bills next week, which the groups hope will include expert witnesses on crowdfunding so that Senators can be properly informed about existing platforms, and how the new space will protect investors.
The groups underscore the importance of the need to work together to enact solutions that will help small business owners invest, grow and create jobs "Capital is the lifeblood of our economy, and without it small business owners and entrepreneurs simply cannot generate the new jobs, breakthrough innovations and economic impact that are necessary for bringing our nation back to sustained growth," the groups conclude in the letter.
The letter was signed by Harry Alford, President & CEO, National Black Chamber of Commerce; Kristie Arslan, President & CEO, National Association for the Self-Employed; Roger Campos, President & CEO, Minority Business Roundtable; Allen Gutierrez, National Executive Director, The Latino Coalition; Barbara Kasoff, President & CEO, Women Impacting Public Policy (WIPP); Karen Kerrigan, President & CEO, Small Business & Entrepreneurship Council; and Todd McCracken, President, National Small Business Association.
Karen Kerrigan, President & CEO
Crowdfunding Legislation: Time to Move Forward!
Everybody seems to be onboard with crowdfunding. Well, almost everybody.
Using the Internet and social media, crowdfunding allows entrepreneurs to raise limited amounts of capital from a wide array of micro-angel investors. In this common-sense way of expanding the universe of potential investors, transparency and a large population - the crowd - wind up evaluating each investment opportunity.
Making crowdfunding legal makes sense given the capital needs of small firms, and the tremendous opportunities opened for small investors via the Internet and social media. And rare bipartisan support exists for this important economic measure.
For example, on November 3, the U.S. House of Representatives passed the Entrepreneur Access to Capital Act (H.R. 2930), which again allows small businesses and small investors to get together via the Internet, by a vote of 407-17. Specifically, the legislation allows crowdfunding when the total amount of capital to be raised is $2 million or less, with individual investments limited to $10,000, or 10 percent of an investor's income, whichever is less.
President Barack Obama has embraced crowdfunding. On November 2, the administration released the following in a "Statement of Administration" policy: "In the President's September 8th Address to a Joint Session of Congress on jobs and the economy, he called for cutting away the red tape that prevents many rapidly growing startup companies from raising needed capital, including through a ‘crowdfunding' exemption from the requirement to register public securities offerings with the Securities and Exchange Commission. This proposal, which would enable greater flexibility in soliciting relatively small equity investments, grew out of the President's Startup America initiative and has been endorsed by the President's Council on Jobs and Competitiveness. H.R. 2930 is broadly consistent with the President's proposal. This bill will make it easier for entrepreneurs to raise capital and create jobs."
Steve Case serves on the President's Council of Jobs and Competitiveness, and also is chief executive of investment firm Revolution and heads up the public-private Startup America Partnership. Speaking at the Washington Economic Club on February 23 about the importance of entrepreneurship in the U.S., as the Washington Post reported, Case "underlined the importance of improving access to capital by allowing entrepreneurs to tap into modern financing alternatives like online crowd-funding platforms."
So, what's the hold up? The U.S. Senate has yet to take action.
Senate bills would have different funding levels and tighter regulations. As reported by CNBC.com on February 14, "Karen Kerrigan, CEO of the Small Business & Entrepreneurship Council says she thinks it has an 80 percent chance of passing the Senate when it does come up for a vote. ‘It has deep bipartisan appeal and President Obama's support,' she says. The only roadblock seems to be state regulators, who fear massive potential unregistered securities fraud. ‘They're spreading fear and slowing the process,' she says."
In particular, state regulators want to prevent the preemption of state law, and are seeking to severely restrict the maximum amount that can be invested by an individual.
The effort to over regulate in the Senate, in response largely to this lobbying from state regulators who in the end are seeking to protect their turf (as government regulators and bureaucrats do), places this common-sense, pro-entrepreneur crowdfunding measure at risk. With transparency and basic safeguards, as proposed by the House and the President, crowdfunding can be a tremendous opportunity for entrepreneurs to find the capital needed to start up and/or grow. It would be a clear plus for U.S. economic growth, competitiveness and job creation.
_______
Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His new book is "Chuck" vs. the Business World: Business Tips on TV.
Using the Internet and social media, crowdfunding allows entrepreneurs to raise limited amounts of capital from a wide array of micro-angel investors. In this common-sense way of expanding the universe of potential investors, transparency and a large population - the crowd - wind up evaluating each investment opportunity.
Making crowdfunding legal makes sense given the capital needs of small firms, and the tremendous opportunities opened for small investors via the Internet and social media. And rare bipartisan support exists for this important economic measure.
For example, on November 3, the U.S. House of Representatives passed the Entrepreneur Access to Capital Act (H.R. 2930), which again allows small businesses and small investors to get together via the Internet, by a vote of 407-17. Specifically, the legislation allows crowdfunding when the total amount of capital to be raised is $2 million or less, with individual investments limited to $10,000, or 10 percent of an investor's income, whichever is less.
President Barack Obama has embraced crowdfunding. On November 2, the administration released the following in a "Statement of Administration" policy: "In the President's September 8th Address to a Joint Session of Congress on jobs and the economy, he called for cutting away the red tape that prevents many rapidly growing startup companies from raising needed capital, including through a ‘crowdfunding' exemption from the requirement to register public securities offerings with the Securities and Exchange Commission. This proposal, which would enable greater flexibility in soliciting relatively small equity investments, grew out of the President's Startup America initiative and has been endorsed by the President's Council on Jobs and Competitiveness. H.R. 2930 is broadly consistent with the President's proposal. This bill will make it easier for entrepreneurs to raise capital and create jobs."
Steve Case serves on the President's Council of Jobs and Competitiveness, and also is chief executive of investment firm Revolution and heads up the public-private Startup America Partnership. Speaking at the Washington Economic Club on February 23 about the importance of entrepreneurship in the U.S., as the Washington Post reported, Case "underlined the importance of improving access to capital by allowing entrepreneurs to tap into modern financing alternatives like online crowd-funding platforms."
So, what's the hold up? The U.S. Senate has yet to take action.
Senate bills would have different funding levels and tighter regulations. As reported by CNBC.com on February 14, "Karen Kerrigan, CEO of the Small Business & Entrepreneurship Council says she thinks it has an 80 percent chance of passing the Senate when it does come up for a vote. ‘It has deep bipartisan appeal and President Obama's support,' she says. The only roadblock seems to be state regulators, who fear massive potential unregistered securities fraud. ‘They're spreading fear and slowing the process,' she says."
In particular, state regulators want to prevent the preemption of state law, and are seeking to severely restrict the maximum amount that can be invested by an individual.
The effort to over regulate in the Senate, in response largely to this lobbying from state regulators who in the end are seeking to protect their turf (as government regulators and bureaucrats do), places this common-sense, pro-entrepreneur crowdfunding measure at risk. With transparency and basic safeguards, as proposed by the House and the President, crowdfunding can be a tremendous opportunity for entrepreneurs to find the capital needed to start up and/or grow. It would be a clear plus for U.S. economic growth, competitiveness and job creation.
_______
Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His new book is "Chuck" vs. the Business World: Business Tips on TV.
No Start-Ups, No Recovery
A Challenger, Gray & Christmas survey found that 2011 marked the lowest start-up rate in the 11 years since their study began. The waning state of entrepreneurship demonstrates why the U.S. Senate needs to get off the dime and pass H.R. 2930, the "Entrepreneurs Access to Capital Act" -- otherwise known as the crowdfunding bill.
GOP Senators are having a press event today to urge passage of four capital access bills that swept through the House with huge bipartisan majorities. For example, the vote for H.R. 2930 was 407-17. President Obama supports these bills, so what is the hold up in the Senate? Entrepreneurs need access to capital – the environment is getting steadily worse.
Call your U.S. Senators at 202-224-3121 and demand that they act on the bipartisan, Obama-supported crowdfunding bill – H.R. 2930!
Karen Kerrigan, President & CEO
GOP Senators are having a press event today to urge passage of four capital access bills that swept through the House with huge bipartisan majorities. For example, the vote for H.R. 2930 was 407-17. President Obama supports these bills, so what is the hold up in the Senate? Entrepreneurs need access to capital – the environment is getting steadily worse.
Call your U.S. Senators at 202-224-3121 and demand that they act on the bipartisan, Obama-supported crowdfunding bill – H.R. 2930!
Karen Kerrigan, President & CEO
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