Clarke Dryden Camper is Senior Vice President, Head of Government Affairs and Public Advocacy at NYSE Euronext, a...
House Financial Services committee (credit: Wikipedia)
Building on the bipartisan success of last year’s JOBS Act, some House members plan to introduce "JOBS Act 2.0" legislation that aims to increase investor interest in startup businesses and “make it easier for small companies and entrepreneurs to raise capital,” reports POLITICO.
The JOBS Act -- signed into law by President Obama in April 2012 -- facilitates capital raising and crowd-funding efforts for the startup and small business communities. Since then, according to the House Financial Services Committee, nearly 600 companies have selected emerging-growth status as provided by the JOBS Act, with about one-third of those companies listed or pending a listing on U.S. exchanges.
This week, the House Financial Services Subcommittee on Capital Markets held a hearing to revisit the JOBS Act’s mission and consider new ways to improve investment in small businesses.
Subcommittee Chair Scott Garrett (R-NJ) said in his opening statement that “startup companies and small businesses are the backbone of our economy, generating millions of jobs in the U.S. every year.” These companies, Garrett continued, “often find it difficult to raise capital to launch and grow their businesses,” and the JOBS Act provides investors with “more opportunities to put their money to work.”
Georgetown Law professor Donald Langevoort stated in his prepared testimony that “the JOBS Act hardly exhausts the possibilities for innovations in capital-raising and secondary trading that can make our financial markets more robust and opportunities for honest entrepreneurship more compelling.” Langevoort cautioned that policymakers and investors should be wary of “reforms driven by the desire to attract capital from less sophisticated investors simply because there are so many of them and they might be more excitable and less demanding."
According to POLITICO, Rep. David Schweikert (R-AZ) also is planning to propose language that “would allow shares in small companies to be traded in wider increments than the current system that prices shares in one cent increments."
A second hearing on the JOBS Act 2.0 will be held in July.