Chairman Jeb Hensarling

Legislation

H.R. 2930, the Entrepreneur Access to Capital Act
Posted by on October 07, 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.”

Comments
The opinions expressed below are those of their respective authors and do not necessarily represent those of this office.
  • William Carleton commented on 10/13/2011
    Thanks for taking public comments. The "general solicitation" prohibition has no doubt been problematic, though that rule is arguably now observed largely in the breach; the more substantive impediments to crowdfunding have been state securities laws. This bill as drafted clearly intends to preempt state law, so that the federal exemption will always triumph over inconsistent state regulation. That's probably the only way the concept can work, but perhaps it should be clearer in the summary that federal preemption over states is a big part of this bill?
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