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Congressman Dan Donovan

Representing the 11th District of New York


Donovan, House Pass Bill To Help Startups Access Capital

April 6, 2017
Press Release
“Supporting America’s Innovators Act” brings venture capital rules into the 21st century, improves opportunity for startups to access angel investors

Washington, DC – April 6, 2017….Congressman Dan Donovan (NY-11) today voted in favor of the Supporting America’s Innovators Act, which passed the House by a 417-3 margin. Entrepreneurs – the principal drivers of American innovation and growth – usually need early investors to get their fledgling businesses off the ground. “Angel investors” provide critical funding to startups at very early stages. Angel investments generally can’t be based on a company’s past performance (because early startups have no performance history), and are therefore very risky but often crucial to a startup’s growth.

The legislation that passed the House today increases to 250 the maximum number of investors in a qualified venture capital fund before the fund is subject to onerous regulatory requirements by registering with the Securities and Exchange Commission. The current cap of 100 investors was instituted in the 1940s, before modern finance developments like Internet-based crowdfunding.

Congressman Donovan said, “We have a complex economy with overly-complicated rules, but one simple principal remains: burdening businesses with unnecessary regulations kills jobs and growth. The bill I voted to pass today is a common-sense measure to increase the amount of capital available to entrepreneurs. Government’s job is to allow private enterprise to prosper within a set of fair boundaries. I’ll continue focusing on getting government out of the way to unleash the private sector.”

According to the Angel Capital Association, 8.9 percent of dollars invested by angel groups were in New York. By increasing the cap on investors in qualified venture capital funds, the legislation will provide greater capital investment opportunities for innovative companies and start-ups.