This was a busy week for Crowdfunding in Washington, DC. Sherwood Neiss, Chief Advocate for the Startup Exemption spent the last weekend working with and prepping Tim Rowe Founder and CEO of the Cambridge Innovation Center for Tuesday’s Senate Banking Committee Hearing on Capital Formation. Mr. Rowe was the expert panelist speaking about the benefits of Crowdfund Investing (CFI) not only for the 450 startups in his innovation center (including Crowdfund Investing platform Wefunder) but for the thousands of entrepreneurs that don’t have access to Cambridge, Silicon Valley, or Wall St.
Unlike prior hearings that were hostile towards Crowdfund Investing, this hearing had a growing list of bipartisan supporters including once vocal opponent, Senator Charles Schumer. In his remarks he stated, “Given the level of bi-partisan support… passage in the Senate appears not to be a matter of if, but of when. I expect a comprehensive Senate proposal to be announced in the coming days.” With two Senate Bills on Crowdfunding, a compromise solution advanced, and Republicans and Democrats lining up, perhaps the guys at LegalizeCrowdfunding.org will see the light of day soon.
The Senate is under pressure to act or be portrayed as out of touch with Americans who want action in Washington. The House crafted, marked up and voted on six capital formation bills all meant to spur innovation, entrepreneurship and employment. All received overwhelming bi-partisan support, including the Crowdfunding bill H.R. 2930 (the basis of which comes from the Startup Exemption framework) that was approved 407-17. All have been sent over to the Senate where Senator Reid who controls the calendar has refused to act until now.
In a direct affront to the gridlock that exists in Washington, DC, the House decided to show America where in fact the bottleneck in Washington resides – with the Senate. Today the JOBS Act, a compilation of all the already passed, aforementioned Capital formation bills (including Crowdfund Investing) were grouped together in one bill and passed again by the House. This tremendously bi-partisan bill addresses the challenges that are preventing our nation’s job creators from getting capital that they need to innovate and hire Americans. By grouping them together, one bill will be sent to the Senate to take up rather than several. It either keeps the Senate from debating and stalemating on each one or forces them to come up with their own JOBS Act (which is hard since they haven’t taken up and passed any of the bills from the House to date). To further point the finger, the President came out and publicly endorsed the Republican championed legislation.
Backed up against the wall, Senator Reid announced that the Senate will move forward on these capital formation bills. How he will do it is up in the air. The choices are in Committee or on the floor of the Senate. If it is done in Committee then both sides can work out their issues and come to a compromise. If Reid decides to take it directly to the floor then he opens it up to Amendments that historically prove to derail the process and reinforce the gridlock.
Now is the time for entrepreneurs who need access to capital to call both Senate Majority leader Harry Reid (D-NV) at (202) 224-3542 and Senate Banking Committee Chairman Tim Johnson (D-SD) at (202) 224-5842 and let them know that America’s Entrepreneurs need Crowdfunding.