Sunflower State News

U.S. Senators Jerry Moran (R-Kan.), Mark Warner (D-Va.), Tim Scott (R-S.C.), and Ruben Gallego (D-Ariz.) have reintroduced the bipartisan Expanding American Entrepreneurship Act. The bill aims to increase the permitted size of angel funds, allowing a higher number of investors to support start-up companies. The legislation would raise the maximum number of permitted angel investors from 250 to 500 and increase the cap on angel funds from $10 million to $50 million. This is intended to broaden access for new investors who may have less capital, thereby expanding funding opportunities for early-stage startups.

“Entrepreneurship is the bedrock of the American economy and the backbone of communities across our nation,” said one of the senators. “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.”

Another senator added, “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. 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.”

The group emphasized the impact on local economies: “Small businesses are the backbone of the American economy, and every entrepreneur deserves the chance to turn their dreams into reality. 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.”

Addressing challenges faced by emerging businesses, another sponsor stated: “Too many promising start-ups hit a wall because they just can’t raise enough money to get their business off the ground. 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 legislative effort builds on previous reforms made under the Economic Growth, Regulatory Relief and Consumer Protection Act signed into law in 2018. That law included provisions from Sen. Moran designed to expand investment opportunities.

A statement from CAE expressed support for these changes: “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. 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.”

The proposed changes are intended both as regulatory updates and as efforts aimed at broadening participation among individual investors in early-stage U.S. companies.