Congressional Hearing Discusses Crowdfunding

Last week, a congressional hearing on TARP, Financial Services and Bailouts of Public and Private Programs was held by the US House Subcommittee. Topics discussed included crowdfunding, how small businesses and startups can have access to capital, and the modernization of security laws that are preventing small business owners from drawing capital from their networks.

We need to modernize and tweak outdated rules to allow Americans to invest in promising small businesses. Access to capital is becoming much more difficult and we need to identify and develop effective and modern ways for entrepreneurs to connect with potential funders
Karen Kerrigan, Small Business & Entrepreneurship Council President and CEO

New  reforms, supported by the SBE Council, seek to modify existing regulations to allow small businesses to raise capital. These reforms include measures to enforce strong anti-fraud provisions, limit risk and exposure for unaccredited investors, and impose transparency and to limit the amount of seed capital a company might raise.

Present in the “Crowdfunding: Connecting Investors and Job Creators” hearing was Sherwood “Woodie” Neiss, SBE Council member and entrepreneur. According to Neiss, the hearing went amazingly well, with the White House wanting a detailed framework on how to mitigate fraud and demonstrating interest in knowing detailed successful crowdfunding stories so they can be set up as an example.

“Crowd Fund Investing is not permitted by security laws today but it stands to be a powerful method of financing, where groups of people will come together to invest in startups and provide valuable knowledge and experience to help an entrepreneur succeed,” Neiss said.