The Senate appears ready to follow the House’s lead and pass legislation that would make it easier for small companies to obtain capital from investors.
Senate Majority LeaderHarry Reid, a Democrat from Nevada, announced early last week that the Senate would move forward on bills “to spur small-business growth” by streamlining rules on capital-raising while still protecting investors.
The House overwhelmingly passed legislation in November that would allow businesses to use “crowdfunding”—soliciting small equity investments from large numbers of people via the Internet—as long as the total raised is $2 million or less. The bill limits individual investments in crowdfunded securities to $10,000 or 10 percent of the investor’s income.
In addition, the House raised the threshold for stock offerings under the Securities and Exchange Commission’s Regulation A from $5 million to $50 million. This would allow more companies to raise capital without registering the…
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