Vote Explanation for H.R. 4498 — Helping Angels Lead Our Startups (HALOS) Act
In today’s global economy, Congress needs to provide America’s entrepreneurs and startups with the resources they need to be successful. Angel investors (angels) have played a vital role in funding startup enterprises in the United States; indeed, Google, Facebook, Amazon, Costco, and Starbucks all owe their success to investors who took a chance and used their funds to get these businesses off the ground. According to the Angel Capital Association, angels invested approximately $24.1 billion in over 73,000 startups throughout the country in 2014.
H.R. 4498 would help angel investors, business experts, and entrepreneurs connect with startup companies — enabling them to grow and create jobs, fueling economic growth. Specifically, the bill clarifies Securities and Exchange Commission (SEC) regulations to ensure small businesses may participate in educational “demo days” without the burden of verifying that attendees are accredited investors. These events provide invaluable opportunities for entrepreneurs to meet and exchange ideas with students, professors, business professionals, and potential future investors.
While opponents of H.R. 4498 have raised concerns that this legislation would lower investor protections, in fact the bill expressly prohibits demo day sponsors from making investment recommendations or providing investment advice. The legislation also prohibits the sale of securities, or soliciting attendees to purchase securities, during a demo day.
Across the country, demo days have become vital to startup growth. As a member of the Small Business Committee, I know that Congress can do more to spur innovation and economic growth for startups. H.R. 4498 is a step in the right direction, which is why I voted in support of this legislation.