Crowd-funding a Hot Topic for Government, Businesses

Legislation is going through the United States Congress to make it easier for small businesses in America to benefit from crowd-funding. The Wall Street Journal blog relays:

The U.S. House advanced legislation this week that would make it easier for smaller companies to raise money from investors.

House lawmakers, in overwhelming bipartisan votes, completed work Thursday on four bills as the measures drew interest in the Senate. President Barack Obama also signaled support for at least one of the bills.

Among other things, the House by a vote of 413-11 approved a bill to make it easier for companies to advertise private offerings with wealthy investors and voted 407-17 to allow startup companies to raise up to $10,000 from individuals over the Internet.

Supporters hope the bills, if signed into law, will help small firms grow in size and hire new workers.

Sen. Kirsten Gillibrand (D., N.Y.), who is weighing introducing capital formation legislation in the Senate, said there is widespread need for Congress to act. “Everywhere I spend time across the state I talk to small business owners and entrepreneurs that need access to capital to grow and create jobs,” Ms. Gillibrand said.

The advertising provision would end a Securities and Exchange Commission ban on “general solicitation” that effectively limits the ability of companies to reach out to potential new investors. “Under the current ban, if you have a good idea but you don’t have a prior relationship, it cuts off a whole section of investors,” said Rep. Kevin McCarthy (R., Calif.) said in an interview.

The Internet bill would allow startups to use “crowd-funding” methods to tap thousands of investors for very small amounts of shares without the firm having to register first with the SEC. Introduced by Rep. Patrick McHenry (R., N.C.), the bill would allow startups to raise up to $2 million through Internet solicitations and social networking and online sites designed for capital raising.

Gestures of Bipartisanship? Bosma Goes Bold on Day One

On a day usually reseved more for ceremony than substance, new Indiana House Speaker Brian Bosma shook things up on Tuesday during Organization Day at the Statehouse. Among his pronouncements:

  • Appointing two Democrats (Chet Dobis and Steve Stemler) to committee chair posts. That is believed to be the first time members of the opposite party have been granted that opportunity in the nearly 200 years of Indiana statehood.
  • Creating a new group (to be chaired by Dobis) titled the Select Committee on Government Reduction. The goal: get rid of unnecessary regulations, as well as boards and commissions that no longer serve a critical importance (many will fit into that category).
  • Calling on all committee chairs to consider legislation offered by all members — regardless of party.
  • Limiting state reps to no more than 10 bills each, saying, "If you can’t get your agenda done in 10 bills, maybe your agenda is too long."
  • Announcing that all House committee hearings will be broadcast over the Internet, giving the public the opportunity to following the proceedings if so desired.

It’s easier in November than January to pledge bipartisanship and vow to listen to what the voters had to say in declaring business as usual is not good enough. But this has all the sights and sounds of more than political posturing.  Let’s hope it is the first of many signs that the General Assembly is serious about placing progress on critical issues over partisan power plays. It would be a most welcome change.