Last week, Massachusetts Senator Scott Brown confirmed that he is supporting plans to introduce a new bill that could change the way the nation’s startups are funded. The bill – which is similar to one recently passed by the House – would attempt to change provisions by the Securities and Exchange Commission that inhibit startups from raising capital through crowdfunding.
The bill would allow startups across the country to sell up to $1 million in securities to investors, who could each invest $1,000 in the fledgling company legally. In addition, the bill would aim to eradicate a number of government hurdles that currently bar this practice, something that opponents of the regulation say prohibits growth in an age when the internet and social media provide viable funding options for other initiatives.
On November 3, the House of Representatives passed the Entrepreneur Access to Capital Act, which received backing from the White House and was passed by an overwhelming majority, according to Forbes. The voting records suggest the initiative has support from both parties.
“This sounds like a legislation that, if done right, could spur innovation by reducing legal expenses for startups and increasing access to capital,” Alex Cook, a Boston-based entrepreneur, told Boston Business Journal.
While the proposed bill could help startups achieve the kind of funding they need to get off the ground, these small enterprises need to ensure that they make the best use of this capital. By investing in initiatives that have been proven to reduce a company’s communications costs – such as VoIP telephony services – these individuals could find voice and data solutions that help the company drive forward without mishaps.
Last week, Massachusetts Senator Scott Brown confirmed that he is supporting plans to introduce a new bill that could change the way the nation’s startups are funded.