U.S. Sen. Mike Rounds (R-SD) on March 24 proposed legislation that aims to increase capital for America’s small businesses by encouraging more investment by venture capital firms.
“South Dakota entrepreneurs and startups need access to capital to grow,” said Sen. Rounds, who serves on the U.S. Senate Banking, Housing, and Urban Affairs Committee. “Small businesses are the foundation of our communities. They create local jobs and support their neighbors.”
If enacted, the Developing and Empowering our Aspiring Leaders (DEAL) Act of 2022, S. 3914, would direct the Securities and Exchange Commission (SEC) to exempt certain investments by venture capital funds from SEC registration requirements, according to a bill summary provided by Sen. Rounds’ office.
Specifically, S. 3914 would allow investments acquired through secondary transactions to be considered as qualifying investments for venture capital funds, the summary says.
“The DEAL Act would encourage more investment by venture capital firms into new businesses, further fueling growth in our communities,” Sen. Rounds added.
The bill, which is supported by both the U.S. Chamber of Commerce and the National Venture Capital Association (NVCA), has been referred for consideration to the Senate Banking, Housing, and Urban Affairs Committee.
“This bill will support the next generation of high-growth American companies and expand entrepreneurial activity into more regions of the country,” said Bobby Franklin, NVCA President and CEO.
Sen. Rounds’ bill is the companion bill to the Developing and Empowering our Aspiring Leaders Act of 2021, H.R. 4227, sponsored on June 29, 2021 by U.S. Rep. Trey Hollingsworth (R-IN).
According to the congressional record, both Sen. Rounds and Rep. Hollingsworth first introduced the bill (S. 3576 / H.R. 6177) during the 115th Congress in 2018, but the measure stalled in committee in each chamber.