Last week, Congressman Patrick McHenry (R, NC-10) joined with U.S. Senators Heidi Heitkamp (D-ND) and Dean Heller (R-NV) to introduce bipartisan, bicameral legislation to help encourage and boost investments in small businesses and startups in western North Carolina and throughout the country. 

H.R. 1219, the Supporting America's Innovators Act of 2017 amends an exemption under the Investment Company Act of 1940 by increasing the investor limitation from 100 to 205 people for qualifying venture capital funds. The bill would eliminate a significant barrier facing small businesses and startups, instead incentivizing venture capital funds to grow their investments in rural-state entrepreneurs, helping local economies grow and thrive. 

Often, would-be venture capitalists are discouraged from establishing funds in rural areas where smaller-dollar investors are more common, for fear of violating the U.S. Securities and Exchange Commission’s (SEC) limit of 100 accredited investors before a fund is required to spend the time and money registering with the agency. While this may not be an issue for some venture capital funds in high-net worth areas of the country – whose high-dollar investors make this ceiling difficult to reach – it can deter venture capital funds who would otherwise seek investments in states like North Carolina where local small businesses and startups often identify initial seed funding as their primary hurdle to getting off the ground. The Supporting America's Innovators Act would address this problem. 

“Small businesses drive our economy and create jobs, but have suffered the most in recent years.  With small business lending down, we need to pursue policy that encourages greater innovation in capital formation and allows American to invest in each other. The Supporting America’s Innovators Act does that and I’m proud to join with a bipartisan, bicameral group to introduce this important bill,” said Congressman McHenry.

“Too often, federal rules are written without rural America in mind, causing local small businesses and startups to lose out – but my bipartisan bill with Senator Heller seeks to change that,” said Senator Heitkamp. “Rural-state entrepreneurs shouldn’t be precluded from investment opportunities in their startups or small businesses, but when the U.S. Security and Exchange Commission limits accredited investors to 100 before registration with the agency is required – which doesn’t take long in rural areas where small-dollar investments are more common – that’s exactly what’s happening, and it’s time to level the playing field. By removing roadblocks to venture capital investments, we can help grow opportunities rural-state small businesses and startups need to thrive.” 

“Growing businesses need capital investments in order to expand, invest, and hire new employees. This bipartisan legislation updates outdated limits on investments, allowing for Nevada’s job creators to access critical capital that they can use to grow. Nevadans are tired of Washington limiting innovation and holding back our economy, and this proposal is another way to curb excessive government interference while supporting entrepreneurship,” said Senator Heller.