My Holiday Wish List for Startups, 2013 Edition

Wish List for StartupsWhat Congress Can Do To Make 2013 a Great Year For Startups

By Joe Wallin

Now that 2012 is winding down, it is worth considering what Congress can do in 2013 to make it a great year for startups. I put together the following short list in hopes of starting the conversation. I have a longer list on, if you are interested. (See

Idea Number 1–Make Equity Crowdfunding A Reality

How about making equity crowdfunding real? The JOBS Act crowdfunding provisions are ridiculously complex. Labrythine. Startups are going to have to spend fortunes to comply with them. All for a capped fund raise. As I’ve written, the benefits of the law as passed are capped, but the costs are not. Plus, we are probably going to have to wait the entirety of calendar year 2013 for the SEC to issue rules that still will be only draft rules. We need a simpler law.

Here is an idea, Congress!: Pass a new law. Make this one simple. Here is how you do it. Simply exempt small transactions from federal securities law entirely! Pass a law that says that investments of less than $500 per person and $500,000 in the aggregate are not covered by federal securities laws, and state securities laws are expressly preempted. OK, and maybe the investor cannot invest more than 10% of his or her net worth. Simple! No SEC regulations required. Let’s make it happen.

Idea Number 2–Make General Solicitation in All-Accredited Offerings a Reality

The SEC and the states should make general solicitation in all-accredited investor offerings under Rule 506 a reality. Again, the SEC has hung us up, refusing to enact regulations by the statutory deadline. Congress, pass an amendment to the law that repeals the ban on general solicitation without requiring any SEC regulations.

Idea Number 3–Re-Enact the 100% Capital Gains Tax Exclusion for Startup Investments

Congress should re-enact the 100% tax exclusion for gains on qualified small business stock held for more than 5 years under Section 1202. President Obama brilliantly pushed for this, and it became law–for a brief period of time–but then expired. Let’s renew it and make it permanent.

Idea Number 4–Fix the High-Tech Worker Immigration Problem

Don’t hold up immigration reform for high-tech workers pending comprehensive immigration reform. Fix the problems for high-tech workers now. A global immigration bill would be great to pass. But don’t wait for it to remove the barriers for high-tech workers immigrating to work in our U.S. technology industry.

Conclusion and My Letter to Congress

Dear Congress,

You have it in your authority to make 2013 a spectacular year for startups. Please don’t get hung up in bickering. Pass some good law for startups. Make us all proud.

Respectfully yours,


[The views expressed in this blog are those of the author.]

About Joe Wallin

Joe Wallin focuses on emerging, high growth, and startup companies. Joe frequently represents companies in angel and venture financings, mergers and acquisitions, and other significant business transactions. Joe also represents investors in U.S. businesses, and provides general counsel services for companies from startup to post-public.
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  • William Carleton

    Joe, good list. On the equity crowdfunding for nonaccredited investors: conceding on a percentage of net worth as a cap, that overcomplicates it. Now someone has to ask the investors what their net worth is, and do the calculating! Better to lower the per investment max. Or, go with my idea, the ICA, individual crowdfunding account, and put the investor in charge of regulating herself.

    • joewallin

      I agree Bill. We need a really simple law. Really simple. The question is–is Congress capable of enacting something simple?

      • William Carleton

        Absolutely legitimate and fair question, Joe. I will say this though: the McHenry equity crowdfunding bill, with huge bipartisan support, passed the House of Representatives. Now, the McHenry bill wasn’t exactly as simple as your bill or my Individual Crowdfunding Account approach, but it was far, far simpler then what ended up standing in for equity crowdfunding in the JOBS Act (after the regulators organized and the Senate got through gutting it!).

        • joewallin

          The House passed a good high tech worker immigration bill too right?

          • William Carleton

            Joe, I don’t know. I haven’t followed the startup visa stuff closely. I know Brad Feld blogged recently his disappointment. As I recall, the President may want to include that as part of overall immigration reform – not startup or tech industry specific?

          • joewallin

            Yes, but holding up tech worker immigration reform for comprehensive reform means it won’t get done. I think Steve Jobs was of the same opinion, and Steve Case and other thought leaders feel the same. Get the high tech worker piece done.

          • joewallin

            See this post by Feld:

            “Vivek Wadhwa wrote a great summary of the recent decision of President Obama not to support the STEM Jobs Act of 2012 in his Forbes article Why Immigration Reform is Destined to be Another Obamacare. It’s more of the “all or nothing” strategy around immigration I’ve been hearing from the White House since 2009. Obama is a strong proponent of immigration reform, but he wants comprehensive immigration reform, rather than incrementally improving things. There are so many easy fixes that are non-partisan, such as the STEM Jobs Act, and it’s crazy that there isn’t a leadership focus on fixing the straightforward ones now, especially those that impact job creation, innovation, and entrepreneurship.”