By: Pat Gouhin, Chief Executive Officer

In late 2019, the Securities and Exchange Commission proposed amendments to the existing “Accredited Investor” definition to increase access to investment opportunities.  The additions include new categories to the definition that would allow for someone to qualify as an accredited investor based on professional certifications and designations, or other credentials issued by an accredited education institution.  The SEC is not proposing changing the thresholds for an accredited investor and those are expected to stay as is.  A 60-day public comment period was provided in which the Angel Capital Association submitted a response letter for further clarification and expansion of sections of the proposed updates. 

By Marianne Hudson, Executive Director Emeritus

The Securities and Exchange Commission issued a concept paper seeking comments on “harmonizing” securities offering exemptions a few months ago.  These exemptions, like Regulation D, which investors rely on for more than half of all private offerings, set the rules for how securities can be bought and sold without extensive registrations. This SEC paper provided a truly unprecedented opportunity for organizations like ACA to suggest improvements to regulations that impact angels and the startup companies we support. 

By: Pat Gouhin, Chief Executive Officer

I just returned from another trip to Washington, DC where I teamed up with our tax coalition partners; National Venture Capital Association (NVCA) , Biotechnology Innovation Organization (BIO) and Advanced Medical Technology Association (AdvaMed).  We conducted a series of congressional visits with key representatives from the tax writing Senate Committee on Finance and House Committee on Ways and Means. We also met with the Assistant to the President for Financial Policy on the National Economic Council.  This coalition, started by ACA over four years ago by Public Policy Chairman David Verrill, brings a consistent voice to US tax policy that impacts investors and entrepreneurs. It is managed by ACA’s consultants at GrayRobinson.

By: Pat Gouhin, Chief Executive Officer

As part of the staff leadership transition, Marianne Hudson and I recently joined forces in Washington, DC with Chris McCannell and Greg Mesack of GrayRobinson, ACA’s government affairs consultants.  Chris and Greg orchestrated a series of visits with legislators on both sides of the aisle, senior agency executives and other key partners in pursuit of ACA’s 2019 Public Policy Plan.  Meeting objectives included introductions to key allies, as well as re-emphasizing plan priorities which included: 

By: Chris McCannell, Partner at Eris Group

Editor’s Note:  Eris Group is ACA’s federal advocacy firm, providing our association with advice and connections on Capitol Hill, the White House and federal government agencies.  Their expertise and extensive network has helped ACA make considerable headway in Washington, DC.  Below is a note on our accomplishments and work together in 2018.

2018 was another successful year of public policy engagement for the Angel Capital Association. Eris Group is pleased to represent your association in Washington, DC.  Last year we continued to build productive relationships with Members of Congress, regulators, public officials and high-level policy leaders in the early stage capital ecosystem that led to a useful new law for angel funds and supportive tax policies.

By: Marianne Hudson, ACA Executive Director

Recent progress to the American Innovation Act of 2018 (AKA “tax reform 2.0”) to include a proposal to protect Net Operating Losses (NOLs) of startups has the Angel Capital Association cheering.  ACA, along with the National Venture Capital Association, Biotechnology Innovation Organization and AdvaMed called for Congress to address an unintended consequence of rules blocking “loss trafficking.” The bill was introduced to reform rules that can unintentionally punish startups for attracting investments to support the growth of their companies.  Reform to the existing rules, written in the mid-1980s, will have significant impact on startup companies and their ability to gain full valuation for additional investments and exits.

By: Marianne Hudson, ACA Executive Director

Last week I had the pleasure of attending the board meeting of the Center for American Entrepreneurship.  This non-profit, non-partisan organization provides education and advocacy on the critical importance of entrepreneurs and startups to innovation, economic growth and job creation to America’s policymakers.  CAE has advocated for several issues that ACA cares about.

By: Mark Graffagnini, Cara Stone, LLP, ACA Public Policy Advisory Council Member

The Investment Company Act of 1940 (the “ICA”) defines an “investment company” as any issuer which “is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities.” This definition generally includes angel funds, venture capital funds and other types of private equity and hedge funds, unless an exemption applies.

By: Marianne Hudson, ACA Executive Director

ACA and angel investors celebrated victory this week at our nation’s capital as the bill to solve the “99 Investor Problem” passed the House of Representatives on Tuesday, May 22.  The resolution to the 99 investor problem is part of S.2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, which focuses on reducing the regulatory burden on community banks by rolling back Dodd-Frank regulations.  Included in the bill is a provision to raise the cap on the number of investors in angel funds and syndicates from 99 investors to 250 in funds of $10 million or less.  This piece of legislation passed with 258 votes, 33 Democrats voting in favor, so somewhat bipartisan.  The bill was signed by the President on Thursday, May 24, making it law (probably pending rule-making).

By: Marianne Hudson, ACA Executive Director

I thought you would be interested in a handy summary of the tax reform bill, the Tax Cut and Jobs Act, which was signed into law by the President just before the Christmas holiday.  It is by Bloomberg Government and was done before some small tweaks by the Senate, but should be pretty close to the final law.

There are three things to know about tax reform that affect angel investors and new companies, most of which ACA supported and promoted on Capitol Hill: