The House Financial Services Committee (HFSC) is evaluating over 40 legislative proposals designed to improve access to capital for businesses. These bills focus on enhancing public market attractiveness, fostering capital formation, and streamlining funding opportunities for small businesses and startups. Lawmakers engaged in discussions to refine financial regulations to support economic growth, emphasizing the need to create a more inclusive investment environment.
Similar efforts have been made in recent years to address capital access challenges, with previous legislative attempts focusing on easing regulatory burdens and encouraging investment in emerging businesses. However, concerns persist regarding venture capital concentration in a few states and the declining number of publicly listed companies. This latest initiative seeks to build on those past measures while addressing persisting gaps in capital distribution.
What Are Lawmakers Proposing?
The reviewed bills aim to reduce barriers that prevent startups and small businesses from securing necessary funding. Proposals include measures to incentivize investment beyond major financial centers, expand the accredited investor base, and update regulations to make public listings a viable option again. By modifying these frameworks, lawmakers seek to create a more balanced financial landscape that supports businesses across different regions.
How Does This Impact Investors and Entrepreneurs?
If enacted, these measures could provide broader opportunities for investors while facilitating growth for emerging businesses. Some lawmakers noted that only 19% of U.S. households qualified as accredited investors in 2022, limiting investment accessibility. Additionally, the declining number of public company listings has raised concerns about long-term capital formation. Addressing these issues may lead to a more dynamic investment market.
“Our capital markets should work for everyone. That means reducing barriers for startups to access funding, incentivizing investment in regional businesses, and reforming outdated regulations that improve access to growth capital to ensure a public offering is a more viable option again,”
HFSC Chairman French Hill stated during the hearing.
Steve Case, CEO of venture capital firm Revolution, highlighted the bipartisan nature of capital access reforms, underscoring the role of policymakers in fostering innovation.
“Our nation became the global economic leader it is today because of the countless entrepreneurs who had transformative ideas and found fertile ground — fertile, in part, because of policymakers who cultivated an environment for innovation — to bring them to life,”
Case said.
Public feedback is being solicited on the proposed legislation, with the committee providing access to bill details and requesting responses by March 31. Lawmakers emphasized that ensuring an equitable distribution of capital across industries and regions remains a key objective.
Access to capital has long been a challenge for businesses, with venture funding historically concentrated in a few major tech firms. While recent reports indicate an increase in startup investments, many small and medium-sized businesses still struggle to secure credit. This legislative effort aims to provide a more structured pathway for entrepreneurs to obtain funding, potentially stimulating wider economic participation.
