Wednesday, January 25, 2012

President Obama continues to support startups and small business

President Obama again highlighted the importance of access to capital for startups and small businesses during the State of the Union Address last night. The President encouraged Congress to pass an agenda that will help entrepreneurs succeed and help create new jobs, highlighting that this is an effort which is, and should be, supported by both parties.

President Obama highlighted the importance of an economy that encourages "the talent and ingenuity of every person in this country," and stated that "innovation is what America has always been about." He went on to say that most new jobs are created in small businesses and startup environments.

It is important to note that in November 2011, the Small Company Capital Formation Act (introduced by Rep. David Schweikert, R-AZ) passed in the House of Representatives by a vote of 421 to 1. According to a summary by CED Mentor Partner Grant Thornton released on their webpage, this act will amend the Securities Act of 1933 to authorize the SEC to raise the Regulation A offering limit from $5 million to $50 million. This means a less costly and more effective alternative for small companies to access capital markets. 

To review this recent legislation, interested parties can access the bill text at the Library of Congress.