Patrick McHenryChairman

Washington, October 7, 2011 - H.R. 2930, introduced by Rep. Patrick McHenry, permits “crowdfunding” to finance new businesses by allowing companies to accept and pool donations up to $5 million without registering with the SEC. Crowdfunding is an innovative and lower-risk form of financing that enables several individuals to pool money to in a particular company.  SEC regulations prohibiting general solicitation have acted as a barrier to crowdfunding developing and flourishing in the United States.

The bill was approved by the Capital Markets and Government Sponsored Enterprises Subcommittee on a vote of 18 to 14.

Rep. McHenry said, “It’s clear that we need new ideas to help provide small businesses and entrepreneurs the ability to create jobs.  With so much difficulty obtaining capital in today’s economy, most business ideas never make it past the dinner table.  This legislation will connect entrepreneurs with everyday investors to help get their businesses off the ground.  I’m thankful the subcommittee was able to pass this crowdfunding legislation with bipartisan support and look forward to further discussing its merits in the full committee.”