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 quora.com, if you are interested. (See http://qr.ae/1ANtH.)
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
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.
[The views expressed in this blog are those of the author.]