The U.S. House of Representatives passed the Helping Angels Lead Our Startups (HALOS) Act, H.R. 79, which will assist startup companies in gaining access to early capital by enabling them to more easily connect with financial backers.
The bill, sponsored by U.S. Rep. Steve Chabot (R-OH), defines an “angel investor group” and allows these investors to host events for entrepreneurs to let them showcase their work and ideas. It would clarify a Securities and Exchange Commission ruling that put restrictions on attendance at such events.
“One popular way small businesses connect with angel investors is through ‘demo days,’” said Chabot, chair of the House Small Business Committee. “These exciting events are sponsored by universities, non-profits, local governments, or other groups, that allow entrepreneurs to showcase their products and informally meet investors and customers.”
“SEC regulations are threatening to force these events out of business by imposing unwieldy regulations dictating who is and who is not allowed to simply attend,” Chabot said. “We must continue to work together to create an environment where our small businesses, the engines of our economy, grow and flourish. This bill is one more step in that direction.”
The bill passed 344-73 in the House on Tuesday and now moves to the Senate for consideration.
“The early-stage capital for a startup provided by angel investors is vitally important. The HALOS Act fixes a regulatory overreach so it will be easier for small businesses to attract early-stage investment,” said House Financial Services Committee Chairman Jeb Hensarling (R-TX).