The JOBS Act, H.R. 3606 will finally get a vote late today or tomorrow in the U.S. Senate. SBE Council remains confident for passage, but we are not resting on our laurels. Our members and staff are working the Senate to make sure H.R. 3606 passes with a big bipartisan vote. (It will need 60 votes for Senate passage).
Here is a media release SBE Council sent out today:
A vote in the United States Senate is expected today or tomorrow on the Jumpstart Our Business Startup Act (JOBS Act), H.R. 3606, a package of important capital formation reforms supported by President Barack Obama. The legislation passed the U.S. House of Representatives with overwhelming bipartisan support (390-23) on March 8, 2012. Entrepreneurs and small business owners are galvanized about this important legislation, and are working to ensure the package sails through the U.S. Senate.
The JOBS Act includes practical measures to update archaic Securities and Exchange Commission (SEC) rules, and helps to construct a new regulatory framework that leverages technological innovations and practices that will open new pools of capital for small businesses. Besides reforming regulations that will make it less costly and burdensome for small firms to go public and accelerate their growth in the public markets, the legislation allows for crowdfund investing which presents new opportunities for entrepreneurs to access capital.
“Crowdfunding and the JOBS Act need to pass so we can get capital to our nation's job creators. This important piece of legislation addresses the startup and seed-funding gap that was left after the financial meltdown of 2008. It will allow the community to step in and fund fraud-free entrepreneurs and small businesses. Main Street will be able to evaluate becoming investors in our nation's neighborhood shops or the next great startups and will also share in that prosperity,” said Woodie Neiss, founder of StartUp Exemption, who developed a crowdfunding framework upon which the legislation is based upon.
According to Small Business & Entrepreneurship Council (SBE Council) President & CEO Karen Kerrigan, Democrats and Republicans not only listened to entrepreneurs regarding their plight on the issue of capital access, but they also found assurance in solutions that protect investors through new technologies, as well as a modern regulatory framework that will increase transparency and investor engagement.
“The legislation provides a sensible regulatory approach that takes into account the power of technology and the ‘sunshine’ capabilities of social media in protecting investors. Key reforms provide regulatory flexibility and relief, and will enable capital formation. A strong entrepreneurial ecosystem depends on access to capital. Freeing up new sources of capital – as the JOBS Act will do – will strengthen our nation’s small business sector, and add to their job creating capacity,” said Kerrigan
The Senate is expected to vote on H.R. 3606, the JOBS Act, either later today or tomorrow following votes on a Democrat alternative (Reed Amendment) to the JOBS Act and an amendment to fully fund the Export-Import Bank.
For more information and background about the JOBS Act, or crowdfunding and crowdfund investing, please visit www.sbecouncil.org or call 703-242-5840.
Tell your U.S. Senators to vote for the JOBS Act, H.R. 3606! You can contact them at 202-224-3121!
Showing posts with label access to capital. Show all posts
Showing posts with label access to capital. Show all posts
Tuesday, March 20, 2012
Thursday, February 02, 2012
Access to Capital Measure Moving in U.S. Senate
The Stock Act is currently being debated in the United States Senate. Several good amendments will be offered on the Senate floor, including an important one by Senator Thune (Amendment #1477), which addresses a timely and critical challenge for America's entrepreneurs - access to capital.
Amendment #1477, otherwise known as the "Access to Capital for Job Creators Act," will widen the pool of potential funders for entrepreneurs. By lifting the antiquated and onerous "solicitation prohibition" contained in Rule 506 of Regulation D of the Securities Act of 1933, promising enterprises can approach "accredited" investors outside of their personal networks to seek and secure the capital they need to compete and grow. This rule modification is a sensible reform step as proven by the lopsided vote the "Access to Capital for Job Creators Act" companion bill received in the House.
SBE Council has urged all Senators to support #1477, and you can read our letter here.
Karen Kerrigan, President & CEO
Amendment #1477, otherwise known as the "Access to Capital for Job Creators Act," will widen the pool of potential funders for entrepreneurs. By lifting the antiquated and onerous "solicitation prohibition" contained in Rule 506 of Regulation D of the Securities Act of 1933, promising enterprises can approach "accredited" investors outside of their personal networks to seek and secure the capital they need to compete and grow. This rule modification is a sensible reform step as proven by the lopsided vote the "Access to Capital for Job Creators Act" companion bill received in the House.
SBE Council has urged all Senators to support #1477, and you can read our letter here.
Karen Kerrigan, President & CEO
Thursday, December 08, 2011
SBE Council to Host Capitol Hill Briefing on "Crowdfund Investing" - Dec. 13 at 10:00 a.m.
Crowdfund Investing:
A Modern and Transparent Platform to Help Entrepreneurs Access Capital
December 13th
10:00 a.m. -11:00 a.m.
Featuring:
Woodie Neiss, Co-Founder, Startup Exemption
Freeman White, CEO & Founder, Launcht.com
Karen Kerrigan, President & CEO, SBE Council (Moderator)
Crowdfund investing legislation passed the U.S. House 407-17. Now, the U.S. Senate is considering similar legislation that would modernize SEC regulations and allow entrepreneurs to raise and identify new sources of capital through crowdfunding platforms. How will these platforms work to help entrepreneurs raise capital while protecting investors? How do startups use crowdfunding currently? How would startups and startup investors like to use crowdfunding in the future? What about fraud? Experts on crowdfunding and advocates for reform legislation will answer questions about this transformative approach for raising capital.
Briefing will take place at:
Jones Day
51 Louisiana Avenue, N.W.
Washington, D.C. 20001-2113
Rsvp: (703)-242-5840, or mvaught@sbecouncil.org
A Modern and Transparent Platform to Help Entrepreneurs Access Capital
December 13th
10:00 a.m. -11:00 a.m.
Featuring:
Woodie Neiss, Co-Founder, Startup Exemption
Freeman White, CEO & Founder, Launcht.com
Karen Kerrigan, President & CEO, SBE Council (Moderator)
Crowdfund investing legislation passed the U.S. House 407-17. Now, the U.S. Senate is considering similar legislation that would modernize SEC regulations and allow entrepreneurs to raise and identify new sources of capital through crowdfunding platforms. How will these platforms work to help entrepreneurs raise capital while protecting investors? How do startups use crowdfunding currently? How would startups and startup investors like to use crowdfunding in the future? What about fraud? Experts on crowdfunding and advocates for reform legislation will answer questions about this transformative approach for raising capital.
Briefing will take place at:
Jones Day
51 Louisiana Avenue, N.W.
Washington, D.C. 20001-2113
Rsvp: (703)-242-5840, or mvaught@sbecouncil.org
Friday, November 11, 2011
SBE Council Member Jason Best on "Nightly Business Report" -- Crowdfunding and H.R. 2930
The media is focusing more and more on legislation to modernize Securities & Exchange Commission (SEC) rules that enable "crowdfund investing."
In this PBS News "Nightly Business Report" segment, SBE Council member Jason Best (co-founder of Startup Exemption) explains the general concept of crowdfunding and its value to small businesses.
Please remember to attend the "rally for entrepreneurs" on November 17 on the U.S. Capitol grounds! The purpose of the rally is to urge the Senate to quickly act on House-passed legislation -- "Entrepreneurs Access to Capital Act," H.R. 2930 -- which advanced in the House with over 400 votes! President Obama also supports this critical piece of legislation.
Karen Kerrigan, President & CEO
In this PBS News "Nightly Business Report" segment, SBE Council member Jason Best (co-founder of Startup Exemption) explains the general concept of crowdfunding and its value to small businesses.
Please remember to attend the "rally for entrepreneurs" on November 17 on the U.S. Capitol grounds! The purpose of the rally is to urge the Senate to quickly act on House-passed legislation -- "Entrepreneurs Access to Capital Act," H.R. 2930 -- which advanced in the House with over 400 votes! President Obama also supports this critical piece of legislation.
Karen Kerrigan, President & CEO
Senate Passes 3% Withholding Tax Repeal
Small business owners are benefitting from a burst of bipartisan activity to promote certainty, business confidence and economic recovery. Repeal of the 3 percent withholding tax mandate is one such initiative that certainly makes economic and fiscal sense.
With the cost of the mandate far exceeding anticipated revenue gains, and small firms becoming less able to compete for government contracts due to new costs and cash flow constraints spawned by the withholding tax, repeal makes absolute sense. Taxpayers and government at all levels also benefit from repeal.
As SBE Council President & CEO Karen Kerrigan noted in a media release following passage of the legislation, small business owners look forward to President Obama signing this important legislation. The President endorsed the legislation as it moved through the U.S. House and of course continued his support during Senate debate.
There are other opportunities for Democrats and Republicans to work together on legislation. For example, the House-passed "Entrepreneurs Access to Capital Act," H.R. 2930, received over 400 votes.
"This innovative legislation will unlock large pools of capital for small business owners while protecting investors," says Kerrigan. "Entrepreneurs with scalable businesses are in need of capital to grow and create jobs. Now is the time to act on this critical piece of legislation," she added.
With passage of the 3% withholding tax repeal legislation, SBE Council look forward to the Senate extending its streak of bipartisanship by focusing on other critical small business issues that have already passed the House.
With the cost of the mandate far exceeding anticipated revenue gains, and small firms becoming less able to compete for government contracts due to new costs and cash flow constraints spawned by the withholding tax, repeal makes absolute sense. Taxpayers and government at all levels also benefit from repeal.
As SBE Council President & CEO Karen Kerrigan noted in a media release following passage of the legislation, small business owners look forward to President Obama signing this important legislation. The President endorsed the legislation as it moved through the U.S. House and of course continued his support during Senate debate.
There are other opportunities for Democrats and Republicans to work together on legislation. For example, the House-passed "Entrepreneurs Access to Capital Act," H.R. 2930, received over 400 votes.
"This innovative legislation will unlock large pools of capital for small business owners while protecting investors," says Kerrigan. "Entrepreneurs with scalable businesses are in need of capital to grow and create jobs. Now is the time to act on this critical piece of legislation," she added.
With passage of the 3% withholding tax repeal legislation, SBE Council look forward to the Senate extending its streak of bipartisanship by focusing on other critical small business issues that have already passed the House.
Thursday, November 10, 2011
"Rally for Capital" on November 17 -- Entreprenuers Will Urge Senate to Act on "Crowdfund Investing" Bill
Startup Exemption and SBE Council to Host a Crowdfunded Rally
in Support of H.R. 2930
The Startup Exemption and Small Business & Entrepreneurship Council (SBE Council) will hold an event on November 17 to call attention to the need for the U.S. Senate and U.S. Securities and Exchange Commission (SEC) to act on a common sense proposal that would permit crowdfund investing.
The rally coincides with "Global Entrepreneurship Week" and the SEC’s annual meeting on small business capital formation. The event will be held on the Capitol grounds between Union Station and the Capitol building at 8:00 a.m., November 17.
True to the tenants of crowdfunding, the group is crowdfunding the costs of the event with a pitch on IndieGoGo.
The goal of the rally says Sherwood Neiss, Chief Advocate of the Startup Exemption is to “put a face to Joe the Entrepreneur and Jill the Innovator and call for action by the Senate and the SEC. Representative Patrick McHenry used our framework for H.R. 2930, the ‘Entrepreneur Access to Capital Act.’ The bill recently passed the House in a unique burst of bipartisan support with a vote of 407 to 17. This Act represents a major step forward in solving the capital crisis facing our nation’s job creators while bringing securities laws into the modern era.”
Crowdfund Investing (CFI) builds on the tenants of crowdfunding. While in traditional crowdfunding, a group of individuals “donate” small amounts of money to an idea (for example, an art related project). In CFI, individuals use small amounts of money to buy equity in a business. The goal of CFI is to provide entrepreneurs and small businesses with access to capital that they will use to grow and hire. Individuals are motivated to invest by the desire to support an entrepreneur and her business plan, to be a part of the solution to our economic woes, and for a potential financial return.
Jason Best, co-founder of the Startup Exemption said, “Our proposal is a jobs initiative that everyone can agree on and requires no government spending. Providing this funding option to connect entrepreneurs with the capital they need, will unleash the next wave of American innovation and create jobs. With President Obama officially backing Representative McHenry’s bill, we look forward to quickly advancing this common sense framework in the Senate.”
SBE Council President & CEO Karen Kerrigan observed that the quick pace of the crowdfund investing bill demonstrates that members of both political parties understand capital access is a critical issue for both entrepreneurs and our nation's economic recovery.
"Crowd fund investing will give small business owners and entrepreneurs access to sources of capital they currently cannot tap into without triggering complex SEC rules. With common sense reforms, more Americans will be able to invest in promising small businesses, which means more jobs and greater economic growth. Reformulating outdated rules while maintaining investor protections will help entrepreneurs identify and connect with potential funders," said Kerrigan.
She added: "We are very excited that Congress and President Obama are seeking intelligent and innovative ways to help small business owners access capital. Technology and the Internet have leveled the playing field in so many other areas for entrepreneurs, and it only makes sense that they are allowed to tap into its power and the intelligence of the crowd for needed capital."
Crowdfunding has grown in popularity over the past 5 years with millions of participants around the world. Entrepreneurs see CFI as a way to raise moderate amounts of capital and investors see it as a way to help entrepreneurs in their community. Numerous academic reports discuss how SEC rules block small business’ access to capital. SEC-registered Crowdfund Investing websites will provide the platform for investors to analyze ideas and self-select those community entrepreneurs they wish to support.
As written in H.R. 2930, only businesses that reach their funding target will be funded, entrepreneurs cannot raise more than $2M and investors are limited on how much they can invest. The SEC would continue to provide prudent oversight to CFI to mitigate the risk of fraud and protect investors.
Join us on November 17 to Rally for Capital!!
in Support of H.R. 2930
The Startup Exemption and Small Business & Entrepreneurship Council (SBE Council) will hold an event on November 17 to call attention to the need for the U.S. Senate and U.S. Securities and Exchange Commission (SEC) to act on a common sense proposal that would permit crowdfund investing.
The rally coincides with "Global Entrepreneurship Week" and the SEC’s annual meeting on small business capital formation. The event will be held on the Capitol grounds between Union Station and the Capitol building at 8:00 a.m., November 17.
True to the tenants of crowdfunding, the group is crowdfunding the costs of the event with a pitch on IndieGoGo.
The goal of the rally says Sherwood Neiss, Chief Advocate of the Startup Exemption is to “put a face to Joe the Entrepreneur and Jill the Innovator and call for action by the Senate and the SEC. Representative Patrick McHenry used our framework for H.R. 2930, the ‘Entrepreneur Access to Capital Act.’ The bill recently passed the House in a unique burst of bipartisan support with a vote of 407 to 17. This Act represents a major step forward in solving the capital crisis facing our nation’s job creators while bringing securities laws into the modern era.”
Crowdfund Investing (CFI) builds on the tenants of crowdfunding. While in traditional crowdfunding, a group of individuals “donate” small amounts of money to an idea (for example, an art related project). In CFI, individuals use small amounts of money to buy equity in a business. The goal of CFI is to provide entrepreneurs and small businesses with access to capital that they will use to grow and hire. Individuals are motivated to invest by the desire to support an entrepreneur and her business plan, to be a part of the solution to our economic woes, and for a potential financial return.
Jason Best, co-founder of the Startup Exemption said, “Our proposal is a jobs initiative that everyone can agree on and requires no government spending. Providing this funding option to connect entrepreneurs with the capital they need, will unleash the next wave of American innovation and create jobs. With President Obama officially backing Representative McHenry’s bill, we look forward to quickly advancing this common sense framework in the Senate.”
SBE Council President & CEO Karen Kerrigan observed that the quick pace of the crowdfund investing bill demonstrates that members of both political parties understand capital access is a critical issue for both entrepreneurs and our nation's economic recovery.
"Crowd fund investing will give small business owners and entrepreneurs access to sources of capital they currently cannot tap into without triggering complex SEC rules. With common sense reforms, more Americans will be able to invest in promising small businesses, which means more jobs and greater economic growth. Reformulating outdated rules while maintaining investor protections will help entrepreneurs identify and connect with potential funders," said Kerrigan.
She added: "We are very excited that Congress and President Obama are seeking intelligent and innovative ways to help small business owners access capital. Technology and the Internet have leveled the playing field in so many other areas for entrepreneurs, and it only makes sense that they are allowed to tap into its power and the intelligence of the crowd for needed capital."
Crowdfunding has grown in popularity over the past 5 years with millions of participants around the world. Entrepreneurs see CFI as a way to raise moderate amounts of capital and investors see it as a way to help entrepreneurs in their community. Numerous academic reports discuss how SEC rules block small business’ access to capital. SEC-registered Crowdfund Investing websites will provide the platform for investors to analyze ideas and self-select those community entrepreneurs they wish to support.
As written in H.R. 2930, only businesses that reach their funding target will be funded, entrepreneurs cannot raise more than $2M and investors are limited on how much they can invest. The SEC would continue to provide prudent oversight to CFI to mitigate the risk of fraud and protect investors.
Join us on November 17 to Rally for Capital!!
Friday, October 28, 2011
"Crowdfunding" Advances in House Finance Committee
SBE Council lauds bipartisan support for one of its top initiatives
SBE Council is cheering the momentum behind one of its top initiatives to help small business owners and entrepreneurs access capital. On October 27, the House Financial Services Committee passed the "Entrepreneurs Access to Capital Act," H.R. 2930 by voice vote.
SBE Council and its members planted the seed -- and a specific model -- for crowd fund investing. For much of 2011 we have been aggressively advocating for a new regulatory framework that would make this innovative solution a reality. President Barack Obama supports the framework, and U.S. Representative Patrick McHenry (R-N.C.) put forward legislation in mid-September.
Regarding passage of the legislation in the Finance Committee, entrepreneur and SBE Council member Woodie Neiss said: "It is amazing to see members of both parties get behind this important issue. The understanding that small businesses face a critical shortfall in their capital needs runs deep, and crowd fund investing is a common sense solution. Entrepreneurs now have hope that Washington is coming together to address one of their top concerns."
Neiss testified before the House in mid-September where he provided ideas and a crowd funding model for House members. The model includes strong protections for investors, and ways to tap into the power of technology to increase transparency and investor knowledge. Along with Neiss's framework (which was the impetus for H.R. 2930) other elements of his model were adopted by the Financial Services Committee including the thresholds for investment, registration of crowdfunding sites with the SEC, an online investor test, among other provisions.
SBE Council President & CEO Karen Kerrigan said that the quick pace of this legislative initiative demonstrates that members in both political parties understand capital access is a critical issue for both entrepreneurs and our nation's economic recovery.
"We are pleased to see bipartisan support behind this common sense approach. Crowd fund investing will give small business owners and entrepreneurs access to sources of capital they currently cannot tap into without triggering complex SEC rules. With common sense reforms, more Americans will be able to invest in promising small businesses, which means more jobs and greater economic growth. Reformulating outdated rules while maintaining investor protections will help entrepreneurs identify and connect with qualified, potential funders," said Kerrigan.
She added: "We are very excited that Congress and President Obama are seeking intelligent and innovative ways to help small business owners access capital. Technology and the Internet have leveled the playing field in so many other areas for entrepreneurs, and it only makes sense that they are allowed to tap into its power for needed capital."
We are hearing the legislation may get a full House vote by the end of this year. We will keep you posted!
SBE Council is cheering the momentum behind one of its top initiatives to help small business owners and entrepreneurs access capital. On October 27, the House Financial Services Committee passed the "Entrepreneurs Access to Capital Act," H.R. 2930 by voice vote.
SBE Council and its members planted the seed -- and a specific model -- for crowd fund investing. For much of 2011 we have been aggressively advocating for a new regulatory framework that would make this innovative solution a reality. President Barack Obama supports the framework, and U.S. Representative Patrick McHenry (R-N.C.) put forward legislation in mid-September.
Regarding passage of the legislation in the Finance Committee, entrepreneur and SBE Council member Woodie Neiss said: "It is amazing to see members of both parties get behind this important issue. The understanding that small businesses face a critical shortfall in their capital needs runs deep, and crowd fund investing is a common sense solution. Entrepreneurs now have hope that Washington is coming together to address one of their top concerns."
Neiss testified before the House in mid-September where he provided ideas and a crowd funding model for House members. The model includes strong protections for investors, and ways to tap into the power of technology to increase transparency and investor knowledge. Along with Neiss's framework (which was the impetus for H.R. 2930) other elements of his model were adopted by the Financial Services Committee including the thresholds for investment, registration of crowdfunding sites with the SEC, an online investor test, among other provisions.
SBE Council President & CEO Karen Kerrigan said that the quick pace of this legislative initiative demonstrates that members in both political parties understand capital access is a critical issue for both entrepreneurs and our nation's economic recovery.
"We are pleased to see bipartisan support behind this common sense approach. Crowd fund investing will give small business owners and entrepreneurs access to sources of capital they currently cannot tap into without triggering complex SEC rules. With common sense reforms, more Americans will be able to invest in promising small businesses, which means more jobs and greater economic growth. Reformulating outdated rules while maintaining investor protections will help entrepreneurs identify and connect with qualified, potential funders," said Kerrigan.
She added: "We are very excited that Congress and President Obama are seeking intelligent and innovative ways to help small business owners access capital. Technology and the Internet have leveled the playing field in so many other areas for entrepreneurs, and it only makes sense that they are allowed to tap into its power for needed capital."
We are hearing the legislation may get a full House vote by the end of this year. We will keep you posted!
Thursday, September 15, 2011
Crowdfunding Gets a Hearing in the U.S. House
SBE Council Member Neiss Testifies on Modernizing SEC Rules
SBE Council member and entrepreneur Sherwood "Woodie" Neiss brings his Crowd Fund Investing (CFI) framework to a congressional hearing today, where there is growing support to modernize outdated security laws that prevent small business owners from tapping into their networks for raising capital.
Today, the U.S. House Subcommittee on TARP, Financial Services and Bailouts of Public and Private Programs is hosting "Crowdfunding: Connecting Investors and Job Creators" where they will hear from Neiss and other witnesses on models for crowdfunding. The CFI model presented by Neiss, which includes strong investor protections, has been crafted in conjunction with SBE Council. President Obama included a crowdfunding proposal in his 2011 American Jobs Act based upon this model.
SBE Council President & CEO Karen Kerrigan argues that at a time when entrepreneurs and small businesses have limited sources for accessing capital, the nation needs to reform archaic rules that are hurting U.S. competitiveness, innovation and entrepreneurship. "We need to modernize and tweak outdated rules to allow Americans to invest in promising small businesses. Access to capital is becoming much more difficult and we need to identify and develop effective and modern ways for entrepreneurs to connect with potential funders," said Kerrigan.
(You can access the testimony of Mr. Neiss by clicking here.)
By revamping the Security and Exchange Commission's (SEC's) position on solicitation and accreditation, we can open the doors to capital for small business owners and entrepreneurs. Allowing for an exemption for Crowdfund Investing, which includes prudent protections for investors, will spur innovation, create jobs, and reinvigorate the economy.
As explained by Neiss in his testimony:
"Crowd Fund Investing (CFI) is not permitted by securities laws today but it stands to be a powerful method of financing, where groups of people will come together to invest in startups and provide valuable knowledge and experience to help an entrepreneur succeed. It will provide a way for unaccredited investors to pool their individual small contributions (likely between $50 and $500 each), and invest in companies and entrepreneurs they believe in. The funding rounds will occur on Internet platforms, which provide an added level of transparency and communication between the investors and the entrepreneurs. And 'Micro-Angel Investors' will support people and businesses they believe in and in turn, help to grow the economy."
SBE Council and Neiss (who is spearheading the "Startup Exemption" initiative) support creating common sense modifications to existing regulations to enable small businesses to raise capital. These reforms are modest, follow the spirit of the Securities Act of 1933 and the Exchange Act of 1934 and include:
Strong anti-fraud provisions
Limited risk and exposure for unaccredited investors
Transparency
Standards-based reporting and
Limit to the amount of seed capital a company can raise
"We are very excited that Congress and President Obama are seeking smart ways to help small business owners and entrepreneurs connect with potential funders. Technology and the Internet have leveled the playing field in so many other areas for entrepreneurs, and it only makes sense that they are allowed to tap into its power for needed capital," Kerrigan added.
SBE Council Staff Post
SBE Council member and entrepreneur Sherwood "Woodie" Neiss brings his Crowd Fund Investing (CFI) framework to a congressional hearing today, where there is growing support to modernize outdated security laws that prevent small business owners from tapping into their networks for raising capital.
Today, the U.S. House Subcommittee on TARP, Financial Services and Bailouts of Public and Private Programs is hosting "Crowdfunding: Connecting Investors and Job Creators" where they will hear from Neiss and other witnesses on models for crowdfunding. The CFI model presented by Neiss, which includes strong investor protections, has been crafted in conjunction with SBE Council. President Obama included a crowdfunding proposal in his 2011 American Jobs Act based upon this model.
SBE Council President & CEO Karen Kerrigan argues that at a time when entrepreneurs and small businesses have limited sources for accessing capital, the nation needs to reform archaic rules that are hurting U.S. competitiveness, innovation and entrepreneurship. "We need to modernize and tweak outdated rules to allow Americans to invest in promising small businesses. Access to capital is becoming much more difficult and we need to identify and develop effective and modern ways for entrepreneurs to connect with potential funders," said Kerrigan.
(You can access the testimony of Mr. Neiss by clicking here.)
By revamping the Security and Exchange Commission's (SEC's) position on solicitation and accreditation, we can open the doors to capital for small business owners and entrepreneurs. Allowing for an exemption for Crowdfund Investing, which includes prudent protections for investors, will spur innovation, create jobs, and reinvigorate the economy.
As explained by Neiss in his testimony:
"Crowd Fund Investing (CFI) is not permitted by securities laws today but it stands to be a powerful method of financing, where groups of people will come together to invest in startups and provide valuable knowledge and experience to help an entrepreneur succeed. It will provide a way for unaccredited investors to pool their individual small contributions (likely between $50 and $500 each), and invest in companies and entrepreneurs they believe in. The funding rounds will occur on Internet platforms, which provide an added level of transparency and communication between the investors and the entrepreneurs. And 'Micro-Angel Investors' will support people and businesses they believe in and in turn, help to grow the economy."
SBE Council and Neiss (who is spearheading the "Startup Exemption" initiative) support creating common sense modifications to existing regulations to enable small businesses to raise capital. These reforms are modest, follow the spirit of the Securities Act of 1933 and the Exchange Act of 1934 and include:
Strong anti-fraud provisions
Limited risk and exposure for unaccredited investors
Transparency
Standards-based reporting and
Limit to the amount of seed capital a company can raise
"We are very excited that Congress and President Obama are seeking smart ways to help small business owners and entrepreneurs connect with potential funders. Technology and the Internet have leveled the playing field in so many other areas for entrepreneurs, and it only makes sense that they are allowed to tap into its power for needed capital," Kerrigan added.
SBE Council Staff Post
Tuesday, March 22, 2011
Whoopi Goldberg Gets Behind Effort to Change Outmoded Regs that Limit Capital Access
Today, the Obama Administration is hosting the conference "Access to Capital: Fostering Growth and Innovation for Small Companies." Hopefully, the event will produce actionable steps that will be pursued and implemented to help entrepreneurs obtain needed capital and financing to help their firms grow or survive. For the past several months, SBE Council has been working with one of its member-entrepreneurs to reform outdated Security & Exchange Commission (SEC) rules that are preventing small business owners from tapping into ready sources of capital.
Capital is critical for startups and small businesses to grow and add to their payrolls. From a policy perspective, there is a long list of reforms and changes that need to take place to ensure capital formation, access and investment. Our success in pushing for reforms has only occurred because of the active support and engagement of our members, and we are thankful one of our long-time members, Woodie Neiss, is stepping up to help us untangle outdated SEC laws.
SBE Council entrepreneur and Miami Beach resident Woodie Neiss is making headway in his reform crusade by using proven skills that helped him launch a successful business. Neiss has been featured in a 2006 INC. magazine cover story, and his business was a three-time INC. 500 listing. His "Type-A, I can do anything I put my mind to" personality is also responsible for Neiss's recent win at Miami's "Startup Weekend" with an idea to use smartphones for instant polling. Neiss is using these skills to attack the policy world, reaching key voices in government, entertainment and business in an effort to reform outmoded SEC rules -- antiquated laws that are prohibiting Americans from investing in entrepreneurs.
According to Neiss, the background of this story is easy enough to understand. Cash is hard to come by. The banks aren't lending like they used to; credit card financing is becoming less of an option because of high interest rates and credit has been cut; Private Equity and Angels seem to be chasing the same few deals; and Venture Capital networks remain difficult to break into.
Unless you can self-fund, have friends with deep pockets or win the lottery, there's really nowhere to turn.
"If you've ever tried to raise capital you know that almost 80 years ago Congress enacted legislation designed to prevent big business from taking advantage of the little guy. These are the same rules that look at a $1 million investment in a business, in the same way as a $1,000 investment. Not quite the same degree of risk," says Neiss.
According to Neiss, the laws are cost-prohibitive from a compliance perspective. Big businesses and the wealthy may be able to afford such red tape, but the little guy cannot.
Companies like Kiva and Kickstarter are trying to address the problem. Entrepreneurs go to the "crowd" and thousands of people fork over millions of dollars in little amounts in return for t-shirts, tokens (or nothing) and warm tingly vibes.
"That's great," says Neiss. "However, what if we could earn a return on our investment? Wouldn't that help foster the capital formation that is currently lacking in the marketplace?"
So Neiss took it upon himself to craft a solution with the SBE Council. Neiss says the solution "is in the spirit of the law and contains very important investor protections and restrictions."
At the end of January he and Kerrigan met with the SEC to plead their case. Neiss has also talked with key staff on Capitol Hill. Next, he flew to New York, won the support of Whoopi Goldberg, and launched http://www.startupexemption.com/ and now has Whoopi talking about it.
Together SBE Council, Goldberg and Neiss are pushing for a new exemption to the Securities laws that would:
Create an exemption for small business offerings (debt or equity) of less than $1,000,000.
Limit the maximum contribution by any one individual to no more than 10% of their prior year's Adjusted Gross Income or up to $10,000/individual, whichever is less. ($10,000 is also in line with banking, foreign exchange, and other established financial limits).
Require a set of standardized and automated procedures for these financing offerings to reduce time and expense for all parties while maintaining transparency. (Neiss suggests using a modified SCOR form. Especially for those companies that are just ideas and don't have financials yet).
Have investors complete an online form/test on the risks involved in private offerings before being allowed to invest.
Allow the creation of channels or sites where ideas, individuals, companies and investors can meet, be vetted by the organizations hosting those channels and entrepreneurial funding can take place. (The SEC could even go so far as to require the registration of these channels/sites for transparency purposes).
What is the goal of this?
"To kickstart ideas that otherwise would never have left the kitchen table. To provide access to capital from peers, and provide entrepreneurs with tools to hold them accountable. Businesses will have capital to innovate and hire, which will eventually provide tax revenues to our hurting government," says Neiss.
Does this compete or replace Private Equity (PE) or Venture Capital (VC)? "No" says Neiss. "Private Equity and Venture Capital aren't focused on these deals. We want to help germinate ideas that will be funded in the future by PE or VCs. However right now we are unable. As a "Type-A, I can do anything" personality, Neiss is determined to change the rules of the game. And you know what? If he's successful, he just might be one of the reasons why our economy roars back to strong levels of growth and job creation.
Karen Kerrigan, President & CEO
Capital is critical for startups and small businesses to grow and add to their payrolls. From a policy perspective, there is a long list of reforms and changes that need to take place to ensure capital formation, access and investment. Our success in pushing for reforms has only occurred because of the active support and engagement of our members, and we are thankful one of our long-time members, Woodie Neiss, is stepping up to help us untangle outdated SEC laws.
SBE Council entrepreneur and Miami Beach resident Woodie Neiss is making headway in his reform crusade by using proven skills that helped him launch a successful business. Neiss has been featured in a 2006 INC. magazine cover story, and his business was a three-time INC. 500 listing. His "Type-A, I can do anything I put my mind to" personality is also responsible for Neiss's recent win at Miami's "Startup Weekend" with an idea to use smartphones for instant polling. Neiss is using these skills to attack the policy world, reaching key voices in government, entertainment and business in an effort to reform outmoded SEC rules -- antiquated laws that are prohibiting Americans from investing in entrepreneurs.
According to Neiss, the background of this story is easy enough to understand. Cash is hard to come by. The banks aren't lending like they used to; credit card financing is becoming less of an option because of high interest rates and credit has been cut; Private Equity and Angels seem to be chasing the same few deals; and Venture Capital networks remain difficult to break into.
Unless you can self-fund, have friends with deep pockets or win the lottery, there's really nowhere to turn.
"If you've ever tried to raise capital you know that almost 80 years ago Congress enacted legislation designed to prevent big business from taking advantage of the little guy. These are the same rules that look at a $1 million investment in a business, in the same way as a $1,000 investment. Not quite the same degree of risk," says Neiss.
According to Neiss, the laws are cost-prohibitive from a compliance perspective. Big businesses and the wealthy may be able to afford such red tape, but the little guy cannot.
Companies like Kiva and Kickstarter are trying to address the problem. Entrepreneurs go to the "crowd" and thousands of people fork over millions of dollars in little amounts in return for t-shirts, tokens (or nothing) and warm tingly vibes.
"That's great," says Neiss. "However, what if we could earn a return on our investment? Wouldn't that help foster the capital formation that is currently lacking in the marketplace?"
So Neiss took it upon himself to craft a solution with the SBE Council. Neiss says the solution "is in the spirit of the law and contains very important investor protections and restrictions."
At the end of January he and Kerrigan met with the SEC to plead their case. Neiss has also talked with key staff on Capitol Hill. Next, he flew to New York, won the support of Whoopi Goldberg, and launched http://www.startupexemption.com/ and now has Whoopi talking about it.
Together SBE Council, Goldberg and Neiss are pushing for a new exemption to the Securities laws that would:
Create an exemption for small business offerings (debt or equity) of less than $1,000,000.
Limit the maximum contribution by any one individual to no more than 10% of their prior year's Adjusted Gross Income or up to $10,000/individual, whichever is less. ($10,000 is also in line with banking, foreign exchange, and other established financial limits).
Require a set of standardized and automated procedures for these financing offerings to reduce time and expense for all parties while maintaining transparency. (Neiss suggests using a modified SCOR form. Especially for those companies that are just ideas and don't have financials yet).
Have investors complete an online form/test on the risks involved in private offerings before being allowed to invest.
Allow the creation of channels or sites where ideas, individuals, companies and investors can meet, be vetted by the organizations hosting those channels and entrepreneurial funding can take place. (The SEC could even go so far as to require the registration of these channels/sites for transparency purposes).
What is the goal of this?
"To kickstart ideas that otherwise would never have left the kitchen table. To provide access to capital from peers, and provide entrepreneurs with tools to hold them accountable. Businesses will have capital to innovate and hire, which will eventually provide tax revenues to our hurting government," says Neiss.
Does this compete or replace Private Equity (PE) or Venture Capital (VC)? "No" says Neiss. "Private Equity and Venture Capital aren't focused on these deals. We want to help germinate ideas that will be funded in the future by PE or VCs. However right now we are unable. As a "Type-A, I can do anything" personality, Neiss is determined to change the rules of the game. And you know what? If he's successful, he just might be one of the reasons why our economy roars back to strong levels of growth and job creation.
Karen Kerrigan, President & CEO
The Administration's "Access to Capital" Conference
Today, the Obama Administration is convening an "Access to Capital" conference. Hopefully the attendees will come up with some actionable ideas to increase the pool of capital in the U.S.
In his opening remarks at the event, U.S. Treasury Secretary Tim Geithner cited three areas where the Administration is currently helping small businesses. Unfortunately, these efforts are falling short because they are so miniscule, targeted or temporary. They are not making much of a difference for America's entrepreneurs.
Secretary Geithner mentioned the Administration's efforts focused on tax relief, as well as a zero capital gains tax rate and a new small business lending fund. However, these initiatives amount to a drop in the bucket or miss the mark in terms of helping the broader small business community.
For example, the temporary zero capital gains tax rate only applies to small C corporations. Most small businesses are not structured as C corporations.
The small business lending fund is just getting off the ground, and appears to be much smaller than the $30 billion that was originally slated for distribution. Apparently, most community banks are not participating in the program because they fear the rules will change mid-game (like they did with the $700 billion bail-out program), and there's a stigma attached to taking government money. Many community banks don't need the government's money -- they only need for economic conditions to improve and for regulators to stop breathing down their necks.
Regarding tax relief, the temporary nature of the provisions continue to drive uncertainty. If Congress and the Administration made these tax provisions permanent, confidence would increase and the economy would strengthen.
As for other solutions that will be discussed, Geithner seemed to bemoan the fact that IPO activity is anemic with U.S. companies going abroad to go public. The cost of going (and remaining) public in the U.S. is prohibitive thanks to Sarbanes-Oxley. The new Dodd-Frank bill, once fully implemented, will be yet another drag on the availability and cost of capital.
It will be interesting to see if the conference produces any good ideas. The bottom line is that government is at the center of the problem -- one hopes that attendees at the conference recognize this, and offer reform solutions.
Karen Kerrigan, President & CEO
In his opening remarks at the event, U.S. Treasury Secretary Tim Geithner cited three areas where the Administration is currently helping small businesses. Unfortunately, these efforts are falling short because they are so miniscule, targeted or temporary. They are not making much of a difference for America's entrepreneurs.
Secretary Geithner mentioned the Administration's efforts focused on tax relief, as well as a zero capital gains tax rate and a new small business lending fund. However, these initiatives amount to a drop in the bucket or miss the mark in terms of helping the broader small business community.
For example, the temporary zero capital gains tax rate only applies to small C corporations. Most small businesses are not structured as C corporations.
The small business lending fund is just getting off the ground, and appears to be much smaller than the $30 billion that was originally slated for distribution. Apparently, most community banks are not participating in the program because they fear the rules will change mid-game (like they did with the $700 billion bail-out program), and there's a stigma attached to taking government money. Many community banks don't need the government's money -- they only need for economic conditions to improve and for regulators to stop breathing down their necks.
Regarding tax relief, the temporary nature of the provisions continue to drive uncertainty. If Congress and the Administration made these tax provisions permanent, confidence would increase and the economy would strengthen.
As for other solutions that will be discussed, Geithner seemed to bemoan the fact that IPO activity is anemic with U.S. companies going abroad to go public. The cost of going (and remaining) public in the U.S. is prohibitive thanks to Sarbanes-Oxley. The new Dodd-Frank bill, once fully implemented, will be yet another drag on the availability and cost of capital.
It will be interesting to see if the conference produces any good ideas. The bottom line is that government is at the center of the problem -- one hopes that attendees at the conference recognize this, and offer reform solutions.
Karen Kerrigan, President & CEO
Wednesday, March 09, 2011
A Petition to Help Small Businesses and Start-Ups Gain Access to Capital
Tell the SEC: Change the 78-year old laws that restrict small businesses/startups from crowd-funding capital!
SBE Council member Woodie Neiss, a successful and passionate entrepreneur, is working to modernize antiquated Security and Exchange Commission (SEC) rules that have become a barrier to investment in America’s small businesses. Woodie and I have met with various policy leaders, regulators and Capitol Hill staff in an effort to reform these regulations so that entrepreneurs can widen their pool of prospective investors who may want to provide capital for their businesses, or business ideas.
A petition calling upon the SEC to change these outdated laws has just gone live. By visiting the petition website, you can join the hundreds who have already signed the petition and learn about the specific recommendations we are making to remove these artificial barriers to capital access.
Please click here to sign the petition and join our efforts!
Karen Kerrigan, President & CEO
SBE Council member Woodie Neiss, a successful and passionate entrepreneur, is working to modernize antiquated Security and Exchange Commission (SEC) rules that have become a barrier to investment in America’s small businesses. Woodie and I have met with various policy leaders, regulators and Capitol Hill staff in an effort to reform these regulations so that entrepreneurs can widen their pool of prospective investors who may want to provide capital for their businesses, or business ideas.
A petition calling upon the SEC to change these outdated laws has just gone live. By visiting the petition website, you can join the hundreds who have already signed the petition and learn about the specific recommendations we are making to remove these artificial barriers to capital access.
Please click here to sign the petition and join our efforts!
Karen Kerrigan, President & CEO
Tuesday, October 26, 2010
Kiva and Visa: A Partnership for U.S. Small Businesses
Kiva and Visa announced a $1 million partnership that will focus on expanding the opportunities for small businesses to benefit from microloans. Specifically, Visa and Kiva will work together on extending the reach of microfinance to more U.S. small businesses, including helping Kiva expand, as it is doing today with ACCIÓN Texas-Louisiana. Visa and Kiva will also work to drive more awareness about the availability of microloans among U.S. small businesses and commission a study on the challenges and opportunities of growing microfinance in the U.S.
For more information, please click here.
Karen Kerrigan, President & CEO
For more information, please click here.
Karen Kerrigan, President & CEO
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