Sens. Warner, Moran, Scott, Gallego Reintroduce Bipartisan Legislation to Bolster American Entrepreneurship

WASHINGTON - U.S. Sens. Mark R. Warner (D-VA), Jerry Moran (R-KS), Tim Scott (R-SC), and Ruben Gallego (D-AZ) reintroduced the bipartisan Expanding American Entrepreneurship Act, which would increase the permitted size of angel funds to allow for a higher number of investors in start-up companies. By allowing more individual investors per angel fund and raising the fund's cap, more investors will be able to invest at a lower rate. This will allow new investors who have less access to capital to invest in start-ups, expanding the funding base for early-stage startups.

"Long before I entered politics, I was in business. I know first-hand how important early investments are for start-ups and small business owners," said Sen. Warner. "This bipartisan legislation will allow entrepreneurs to raise more funds with more contributors, enable small start-ups to expand, and give individuals with less access to capital more opportunities to invest at lower rates."

"Entrepreneurship is the bedrock of the American economy and the backbone of communities across our nation," said Sen. Moran. "Expanding access to angel funds gives Main Street more opportunities to invest in startups while supporting the growth of American small businesses. This legislation represents a much needed change that encourages more companies to go public."

"Small businesses are the backbone of the American economy, and every entrepreneur deserves the chance to turn their dreams into reality," said Sen. Scott, Chairman of the Senate Banking Committee. "Unfortunately, access to capital, especially in early-stage investment, has too often been limited to a select few. By opening the door to more investors, this legislation helps local business owners and entrepreneurs turn ideas into thriving companies, create good-paying jobs, and strengthen communities in South Carolina and across our nation."

"Too many promising start-ups hit a wall because they just can't raise enough money to get their business off the ground," said Sen. Gallego. "By raising the number of investors and the max these funds are able to receive, we can help more start-ups get the money they need to grow, create jobs, and strengthen our economy. I'm proud to help lead this bill to give more entrepreneurs a shot at the American Dream."

This legislation expands on the Economic Growth, Regulatory Relief and Consumer Protection Act, which was signed into law in 2018.

The Expanding American Entrepreneurship Act would:

• Increase the max number of permitted angel investors from 250 to 500
• Raise the cap on angel funds from $10 million to $50 million

"Entrepreneurship is the driving force of economic growth and job creation in America, and capital is a critical resource entrepreneurs need to turn their innovative ideas into thriving businesses," said John Dearie, President of the Center for American Entrepreneurship. "Many new businesses - particularly those that have the potential to grow very quickly - rely on investors who provide early-stage capital in exchange for an equity stake in the company. The bipartisan Expanding American Entrepreneurship Act addresses this problem by expanding parameters of section 3(c)(1) of the Investment Company Act to permit emerging fund managers to raise larger funds with a higher number of permitted investors. CAE thanks Senators Jerry Moran (R-KS), Tim Scott (R-SC), Mark Warner (D-VA), and Ruben Gallego (D-AZ) for their leadership and looks forward to working with them and their Senate and House colleagues to see the bill swiftly enacted into law."

Full text of the legislation can be found here.

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