House Passes Three Small Biz Capital Access Bills

November 8, 2011

The U.S. House of Representatives passed three bills Nov. 2 with strong bipartisan support that would substantially reduce the regulatory impediments to small businesses raising capital.

The Small Company Capital Formation Act of 2011 (H.R. 1070) passed the House by a margin of 421-1. The bill would effectively amend Regulation A by increasing the aggregate offering amount of all securities sold within the prior 12-month period to $50 million. The bill further provides that the securities may be offered and sold publicly and that the securities shall not be restricted securities within the meaning of the Federal securities laws.

The Entrepreneur Access to Capital Act (H.R. 2930) passed the House by a margin of 413-11. This bill would create a so-called crowd-funding exception that would, if audited financial statements are provided to investors, allow a company to raise up to $2 million provided that the aggregate amount sold to any investor in a 12-month period does not exceed the lesser of $10,000 or 10 percent of such investor’s annual income.

The Access to Capital for Job Creators Act (H.R. 2940) passed the House by a margin of 413-11. This bill would allow for general solicitation or general advertising to find investors, provided that all purchasers of the securities are accredited investors.