Demo Days Bill Passed by US House of Representatives


By: Marianne Hudson, ACA Executive Director

Victory! With lots of work by ACA and many leaders, the House passed the HALOS Act, which would ensure companies presenting in demo days would not have tripped the general solicitation trigger and therefore be required to take extra measures to verify all of their investors are accredited.  This is something the entire startup ecosystem – investors, entrepreneurs, accelerators, incubators, universities and more - cares about.  We will now concentrate our efforts on the Senate to make the bill a reality. The bill was approved by a 325-89 vote, meaning it was relatively bi-partisan.

Watching the Representatives debate the bill was fun.  It was a highlight reel of Members of Congress discussing the importance of startups and angel investors to the American economy.

ACA has been a leader in the charge to address this issue, which is an unintended consequence of the JOBS Act and related rulemaking by the SEC.  Demo days were an important part of the startup ecosystem, without problem, for decades.  When new general solicitation rules, however, these events that happened in the world of private investing, were understood to be included in the more complicated general solicitation world.

We have so many people to thank, starting with the bill’s sponsor, Rep. Steve Chabot (R-OH), and its 11 co-sponsors from across the country – Reps. Kyrsten Sinema (D-AZ), Robert Hurd (R-VA), Mark Takai (D-HI), Carlos Curbelo (R-FL), Ann Wagner (R-MO), Ryan Costello (R-PA), Andy Barr (R-KY), Randy Hultgren (R-IL), John Delaney (D-MD), Pete Sessions (R-TX) and Jared Polis (D-CO).

We believe this number of co-sponsors would not have happened without three groups of people:

  • ACA members on the Grassroots Policy Committee, who contacted their legislators – thanks particularly to ACA Vice Chair Linda Smith, who leads this group
  • Eris Group, ACA’s government affairs firm, who set up many meetings and provided the right information for Congressional offices (and addressed a lot of misinformation from opponents)
  • The New Democrat Coalition, which backed the bill and helped get half of the Democrats who voted to support the bill

I like what the “New Dems” had to say in releasing their support of the approved bill:

“Demo days” have become more vital to startup growth over the last 30 years, so it’s increasingly important to set up a clear path for startup businesses to connect with investors and venture capitalists.

“Innovative startup businesses in Arizona and across the country should have every opportunity to grow and succeed,” said Congresswoman Sinema. “This bipartisan solution provides a clear path for startup businesses to connect with angel investors and venture capitalists without the burden of unnecessary regulation and red tape. I will continue working with my colleagues on both sides of the aisle to help our economy thrive.”

The HALOS Act will strengthen the JOBS Act’s intention and allow startups to focus their resources on building their business. With the HALOS Act, American entrepreneurs can create quality jobs and build the nation’s economy.

Thanks for your help ACA members.  We’ll continue to need your help as we take this bill to the Senate – and also addressing some other very important issues, like the accredited investor definition.

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