WASHINGTON – Today, U.S. Senator Chris Murphy (D-Conn.) was joined by U.S. Senators John Thune (R-S.D.), Pat Toomey (R-Pa.), Brian Schatz (D-Hawaii), and Angus King (I-Maine) in reintroducing the Helping Angels Lead Our Startups (HALOS) Act, legislation that would remove burdensome restrictions from individuals who want to invest in startups, and allow those startups to get the investments they need to grow their business and create jobs.
In order for startups to secure capital and grow their businesses, entrepreneurs commonly attend “demo days”, or conferences that allow startups to showcase their business model in front of valuable startup investors, such as “angel investors” and venture capitalists. It is estimated that angel investors provide 90 percent of outside equity to help grow these young businesses, and in 2010, companies in their first year created an average of 3 million jobs. But new Securities and Exchange Commission (SEC) regulations, initiated by the JOBS Act, have put angel investors participating in demo days at risk of being forced to turn over extensive personal financial details to an onerous third-party vetting process. This invasion of privacy deters many investors from backing startups at a time when new businesses need support the most.
The HALOS Act would lift this regulation and instead preserve the same investor vetting process that angel investors have been using at demo days for years. By removing these restrictions and eliminating the potential for an investor’s privacy to be invaded, the HALOS Act will enable startups to continue to get the investments they need to grow and create new jobs.
“Startups are critical to the future of America’s economy,” said Murphy. “They enhance our communities, employ our friends and our neighbors, and innovate to make our nation more competitive in today’s global market. I’ve travelled around Connecticut and have heard from local entrepreneurs and interested backers alike that the most important thing we can do to help these businesses is make it easier for angel investors to put capital behind them – and that’s exactly what our bipartisan HALOS Act will do. I’m proud to reintroduce this bill with such broad bipartisan support and I’ll continue to fight to create better opportunities for both entrepreneurs and job-seekers in Connecticut and across the country.”
“With nearly 8.6 million Americans currently unemployed, we ought to be doing everything we can in Congress to enact policies that help create jobs,” said Thune. “Small businesses and startups are the backbone of our economy. The bipartisan HALOS Act continues in the spirit of the JOBS Act that was signed into law in 2012 and will help entrepreneurs and investors continue to create small businesses and jobs throughout the country.”
“I started a chain of restaurants in Allentown in 1990 with two of my brothers,” said Toomey. “We used our own savings to fund the start-up costs and worked day and night and eventually created hundreds of jobs in the Allentown and Lancaster region. So I understand the unique struggles, uncertainties, and risks involved in starting one's own business. We can make it easier to be innovative. I am pleased to join with Sen Murphy and our colleagues to propose a bill that will make it easier for startups and angel investors to connect and work together to grow their businesses and hire more workers.”
“Hawai‘i’s creative environment is home to many tourism, energy, and technology startups, but unnecessary restrictions can make it tougher for these small businesses to grow,” said Schatz. “Our legislation will make it easier for angel investors to fund small businesses that support our local economy and create jobs.”
“Through startups, our entrepreneurs and innovators push the envelope and build on bold ideas, helping propel our economy forward. But too often they have a tough time getting off the ground because burdensome regulations stymie development,” said King. “By fixing flawed federal rules, the HALOS Act will remove an unnecessary roadblock and help startups grow and thrive.”