CRAMER: Supporting America’s Innovators Act Provides Access to Capital for Entrepreneurs
Listen to Audio Statement Here
WASHINGTON, D.C. – Congressman Kevin Cramer supported a bill passed by the U.S. House of Representatives today, which raises the limit on the number of individuals who can invest in certain venture capital funds before they must register with the Securities and Exchange Commission (SEC).
H.R. 1219, the Supporting America’s Innovators Act of 2017, amends an exemption from registration under the Investment Company Act of 1940 by increasing the investor limitation from 100 to 250 persons for a qualifying venture capital fund. During the 114th Congress, a substantially similar bill passed the House by a bipartisan vote of 388-9.
“Since the recession, gaining access to capital is becoming increasingly difficult for small businesses,“ said Cramer. “Unfortunately, the passage of the Dodd-Frank Act as well as the overwhelming increase in financial regulations has only made matters worse for our community banks and financial institutions. That’s why Congress must continue passing bills like Supporting America’s Innovators Act in order to provide relief for the financial sector and allow our entrepreneurs the access to capital they need in order to live out the American dream.“
According to the House Committee on Financial Services, “With online fundraising and general solicitation becoming more common because of the JOBS Act, companies are bumping up against the limit more frequently.” H.R. 1219 is a companion bill to the bipartisan JOBS Act. As the JOBS Act permitted up to 2,000 individuals to invest in private companies, H.R. 1219 allows qualifying venture capital funds to obtain the backing of up to 250 individuals without having to register under the Investment Company Act, in an attempt to promote capital formation at the earliest stages in a private company’s life cycle.
Due, in part, to its low cost-of-living, low tax burden, and innovative startup incubators, North Dakota has been labeled a small business hotspot with the most per capita startups in the nation, according to a 2016 Kauffman Index for Growth Entrepreneurship study. Cramer has also supported the HALOS Act this Congress, which supports increased access to capital for startups by angel investors.