It may come as a surprise, but this Tuesday the Congress shockingly managed to come to agreement over the small business investment bill. Even with several concerns that the bill would generate more investment scams Congress endorsed the startup bill without much fuss.
The hardships small businesses have met over the years have prompted legislators with the White House to address the matter in a bill that supports startup companies to raise capital. Basically, the legislation will reduce federal regulations that made life a little bit harder for startups these days.
An interesting fact is that despite some Democrat members in the Congress arguing against the bill, president Barack Obama has made it clear he supports it. The bill still needs the president’s signature, but everybody expects him to endorse it too. The president made it clear he endorses the law about three weeks ago, explaining that it is the sort of measure he has been pushing for.
What’s surprising is that the Congress and its bipartisan members endorsed the small business investment bill quite easily, even with several indications that lesser government control over the matter would result in more investment frauds.
The only moment that might have pointed to a possible turmoil within the Congress was Democrats’ request to add at least one measure that would increase investor protections. The truth is that several consumer advocacy groups argued that the bill increases vulnerability to the dot-com era situations.
Democrat Dick Durbin of Illinois argued that the small business investment bill is going to “allow companies to use billboards and cold calls to lure unsophisticated investors with the promise of making a quick buck investing in new companies”.
Republican Mike Ross, D-Prescott, said: “This legislation will help America’s small businesses continue to lead our economic recovery by cutting through some of the red tape and easing the burden of over regulation”.
The bill itself is a mixture of bipartisan legislation proposals and is going to remove any Securities and Exchange Commission regulation for small businesses and startups. Eligible companies are those that have annual gross revenue under the $1 billion mark. At the same time, the bill raises the number of shareholders for a company or a community bank from 500 to 2,000 and increases the value of shares that small companies can sell up to $50 million.