Public Policy

By: Marianne Hudson, ACA Executive Director

All of us know about — or personally know — talented foreign-born entrepreneurs who have created successful businesses in the US.  Think Intel, eBay and Tesla. Immigrant entrepreneurs are behind more than half of America’s startup companies valued at $1 billion or more.

That’s why the Angel Capital Association is joining the National Venture Capital Association (NVCA) and many other leading entrepreneurial organizations to support the International Entrepreneur Rule.

By: Marianne Hudson, ACA Executive Director


New ACA Chair Linda Smith meets with Rep. Ruben Kihuen (D-NV) on June 28, 2017

I am pleased to welcome Linda Smith as she begins to serve as Chair of ACA’s 18-member Board of Directors on July 1.  Linda has served as ACA Vice Chair for two years, during which she has been instrumental in updating ACA’s strategy growth, shaping the policies that impact startup communities and angel investors, and meeting with Congressional representatives regarding important policy issues for angels.

By David Verrill, Chair of ACA’s Public Policy Committee

Ten days ago, I took a trip to Washington, DC with ACA executive director Marianne Hudson and our government affairs team of Chris McCannell and Greg Mesack from Eris Group.  It was an interesting three days, with a combination of planning our policy work for the year, meeting with other associations with overlapping interests, and ten meetings on Capitol Hill.  This was the week after the inauguration of President Trump, and you could see a lot of change in our nation’s capital.  Here is what I learned:

Comprehensive Tax Reform

Comprehensive tax reform is coming (after Congress deals with the repeal and replacement of Obamacare), with the goal of having it done by August 1.  Most believe that the House will follow blueprints by Paul Ryan and former Ways & Means chair Dave Camp as the basis to build on, with the following features:

By: Angela Jackson is an ACA Board Member and Chairs the “Grassroots Group” for ACA members interested in interacting with Members of Congress.  Want to join?  Shoot Angela an email.

Exciting things are happening in Washington, DC relative to advancing the ACA legislative agenda - and we're requesting your immediate help.

Call to Action - by Monday January 9!

ACA just got word that the House of Representatives plans to vote on the HALOS Act next week.  HALOS (Helping Angels Lead Our Startups) exempts demo days from general solicitation rules, meaning that companies that participate in any type of demo day would no longer need to worry about taking extra steps to verify investors are accredited – unless they are going the solicitation 506(c) way.  And angels who prefer to invest in private deals would have better assurances that companies had not tripped the general solicitation trigger.  The bill, HR 79, has great bi-partisan sponsors:  leads Rep. Steve Chabot (R-OH) and Kyrsten Sinema (D-AZ), and co-sponsors Andy Barr (R-KY), Carlos Curbelo (R-FL), John Delaney (D-MD), Randy Hultgren (R-IL), Jared Polis (D-CO), Pete Sessions (R-TX), and Ann Wagner (R-MO).

By: Marianne Hudson, ACA Executive Director

The Angel Capital Association has been very active in educating policy makers in Washington, DC for six years, and I am proud to say that this Fall ACA has ramped up our activity and effectiveness even more.  In case you missed it:  here’s what the association has done to advocate for startups and angels in the last two months, and providing insights to our members:

  • Wrote a letter to the Trump transition team – ACA’s memo highlights the importance of new businesses to job creation in the US and the need to promote policies that free up capital and minimize regulatory burdens.  The focus is on what President Elect Trump can do immediately, during his first 100 days, and also in his first year in office on everything from appointing SEC commissioners who understand early-stage investing to keeping the current accredited investor definition the same to tax policy that catalyzes investment in high growth, innovative startups.

By David Verrill, Managing Director of Hub Investment Group 

Many angels have noticed the unique capabilities of entrepreneurs from outside the US to build great companies. Now, finally, so has the American federal government (noting that our colleague Canadians have been all over this for some time).  The Department of Homeland Security released rules that would allow more foreign born entrepreneurs to stay in the US longer to grow their companies.  One of the main requirements is for angels or VCs to invest in their companies.  The rules will become final after a review of comments to the first public draft. 

By Chris McCannell, Partner at Eris Group

Editor’s Note:  ACA wants to share with our members our progress in Washington.  It’s an important use of member dues, and we believe it is worth every penny.  We work with Eris Group on American public policy issues, and have had great results in the last year – from a 100% exemption on investment gains to House passage of bills that would ensure that demo days are not included in general solicitation and increasing the number of investors in an angel fund or syndicate from 99 to 249.  With Eris Group, ACA has also helped move the conversation about the definition of accredited investor to a more positive one (in angels’ view), and we are now regularly sought out by Members of Congress and other organizations for input and support of legislation and policy issues.

ACA learned in 2010 that Congress and regulators could have a huge impact on angel investors and the startups angels support.  ACA was able to ensure Dodd-Frank didn’t increase the financial thresholds for the accredited investor definition then, but the association learned it needed help from DC professionals to protect angels through that experience.

By: Marianne Hudson, ACA Executive Director

A few weeks ago I attended a meeting of state securities regulators with leaders of different parts of our securities markets in the US and Canada to compare notes.  Not only do I admire the regulators for holding meetings such as this, but I learned a great deal about some of our newest types of securities – equity crowdfunding for everyone and Regulation A (Reg A+ for short).

By agreement of all attendees, I can’t share some specifics of who said what, but let me share some of my general takeaways from the NASAA Capital Formation Roundtable about equity crowdfunding:

  • Anyone can invest in equity crowdfunding offerings via two mechanisms:  1) at the federal level “Regulation Crowdfunding” opened for American citizens on May 16 and 2) “intrastate crowdfunding” allows for state residents to invest in businesses in that state.  Currently 34 states have approved intrastate crowdfunding and 29 are currently online

By: Marianne Hudson, ACA Executive Director

This post originally appeared on Forbes.com

On May 16 when new “Regulation Crowdfunding” took effect, all American citizens received a gift that angel investors have enjoyed for years—they can buy stock in startups. But behind all of the excitement are a few surprises both investors and the companies raising money might not realize. These curveballs may mean that equity crowdfunding, won’t deliver the financial impact that Congress intended for startups when it passed the JOBS Act four years ago. 

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.

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