Toward increasing investments in startup businesses and diversifying the funding base for new companies, U.S. Sen. Jerry Moran (R-KS) on Nov. 15 led a bipartisan bill that would permit more angel investors to invest more money.
The Expanding American Entrepreneurship Act, S. 3319, which Sen. Moran sponsored alongside lead original cosponsor U.S. Sen. Mark Warner (D-VA), would increase the maximum number of permitted angel investors from 250 to 500. The U.S. Securities and Exchange Commission defines angel investors as generally high-net-worth individuals who invest their own money directly in emerging businesses.
S. 3319 also would raise the cap on angel funds from $10 million to $50 million, according to a bill summary provided by the lawmakers.
“Investing in startups shouldn’t be a privilege reserved for only a select group of individuals,” Sen. Moran said. “By increasing the allowed number of investors for angel funds and the max these funds are able to receive, Main Street will have more access to investing.”
At the same time, said Sen. Moran, this would expand opportunities for entrepreneurs to secure investments for their startups.
“Entrepreneurship is the bedrock of the American economy,” he said. “Allowing a larger pool of Main Street investors the ability to raise capital for American small businesses is crucial to more companies choosing to go public.”
The Center for American Entrepreneurship, the Angel Capital Association, and Carta support the measure, which has been referred for consideration to the U.S. Senate.
“This bipartisan legislation will allow entrepreneurs to raise more funds with more contributors, enable startups to gain access to a new pool of investors, and give individuals with less access to capital more opportunities to invest at lower rates,” added Sen. Warner.