U.S. Sen. Mike Rounds (R-SD) introduced legislation that would encourage more investment by venture capital firms.
The Developing and Empowering our Aspiring Leaders (DEAL) Act would direct the Securities and Exchange Commission (SEC) to exempt certain investments by venture capital funds from SEC registration requirements. Specifically, it would allow investments acquired through secondary transactions to be considered qualifying investments for venture capital funds. Rounds said this bill would work to increase capital for small businesses.
“Small businesses are the foundation of our communities. They create local jobs and support their neighbors. The DEAL Act would encourage more investment by venture capital firms into new businesses, further fueling growth in our communities, Rounds said.
The DEAL Act has the backing of the U.S. Chamber of Commerce and the National Venture Capital Association (NVCA).
“As Americans work to recover from the pandemic, the economy needs every resource available to grow businesses and create jobs,” Tom Quaadman, executive vice president of the U.S. Chamber’s Center for Capital Markets Competitiveness, said. “Emerging Growth Companies are an important part of that equation as they represent the future of opportunity in our capital markets, which is why the U.S. Chamber applauds Senator Rounds for introducing the DEAL Act. This important piece of legislation will allow more investment in bright new ideas and future public companies that will power the next generation of American economic success.”
U.S. Rep. Trey Hollingsworth (R-IN) introduced companion legislation in the House on June 29, 2021.
“This bill will support the next generation of high growth American companies and expand entrepreneurial activity into more regions of the country,” Bobby Franklin, NVCA President and CEO said. “U.S. startups are this country’s jobs and innovation engine and improving their chances of success will generate economic opportunity and support America’s technological leadership in the world.”