House unanimously passes Hollingsworth legislation encouraging more investments from venture capital firms

U.S. Rep. Trey Hollingsworth (R-IN) recently introduced legislation encouraging more investment from venture capital firms.

© Shutterstock

The Developing and Encouraging our Aspiring Leaders (DEAL) Act, which unanimously passed the U.S. House Wednesday night, would provide small businesses and startups with more access to capital to grow their business ideas.

“Now more than ever, we need to foster the growth of small businesses and local startups,” Hollingsworth said. “This bill will help Hoosier businesses access the critical capital needed to grow, invest in our communities, and create more jobs. I encourage the Senate to act and pass the companion bill quickly.”

The legislation would require the Securities and Exchange Commission (SEC) to expand the definition of a qualifying investment to include broader equity securities. The bill would allow venture capital funds to provide necessary growth capital as those companies go public without having to register as a registered investment adviser.

The National Venture Capital Association said it applauded the legislation’s passage.

“We are pleased Congress is focused on improving capital formation in the startup ecosystem through a more accurate definition of a venture capital fund,” said NVCA President & CEO Bobby Franklin. “If executed properly, the bill will align venture capital regulation with the current realities of the industry. It will also make more capital available for early-stage companies and expand entrepreneurial activity into more regions of the country.”

Similar legislation was introduced in the Senate by U.S. Sen. Mike Rounds (R-SD)