Steil Introduces the Helping Startups Continue to Grow Act
WASHINGTON, D.C.—Today, House Financial Services Committee member Bryan Steil introduced H.R. 4918, the Helping Startups Continue to Grow Act. Steil’s bill streamlines reporting requirements for new companies so they can invest in growth and innovation. The Helping Startups Continue to Grow Act gives Emerging Growth Companies more time to continue expanding and developing their product under streamlined disclosure and filing procedures.
“Startup companies deserve a fair shot at success. When new businesses succeed, wages rise and the local community thrives. New companies should focus on creating good paying jobs, not regulatory compliance,” said Steil. “This bill reduces regulations and allows companies to invent new products, increase wages for workers, and invest in communities.”
The Helping Startups Continue to Grow Act provides a five-year extension of certain exemptions and reduced disclosure requirements for companies to remain an EGC. Currently, Emerging Growth Companies (EGCs) can maintain their status as an EGC for up to five years after they become a public company. Emerging Growth Companies are young, public companies that are continuing to invest in innovation. However, many of these companies are not generating enough revenue five years after becoming public to support the compliance costs that come with a loss of EGC status. By providing this five-year extension, startup companies do not have to spend their time and money on bureaucratic regulations and burdensome compliance procedures. Instead, these companies can focus on investing in communities, creating good paying jobs, and developing products. H.R. 4918 aims to help all startups, but this especially assists companies developing lifesaving drugs, medical devices, and other products.
The Helping Startups Continue to Grow Act has received the support of numerous organizations including: U.S. Chamber of Commerce, Biotechnology Innovation Organization (BIO), Securities Industry and Financial Markets Association (SIFMA), and National Venture Capital Association (NVCA).
“Public companies have historically proven [to be] a key driver of growth and job creation. The declining number of public companies also leaves fewer options for Main Street investors and retirees to build and sustain wealth. H.R. 4918 advocates for this commonsense legislative solution to expand on the success of the JOBS Act and would provide regulatory relief for small and newly public companies looking to grow and expand,” said Neil Bradley from the U.S. Chamber of Commerce. You can read the full letter of support here.
“As the number of public companies declines, policymakers must ensure out public markets remain the envy of the world. Measures such as H.R. 4918 will encourage more companies to go public without compromising investor protection,” said Jamie Wall, Executive Vice President of Advocacy for SIFMA. You can read the full letter of support here.
“This piece of legislation would reduce the significant costs for small capitalization companies to go public and startups to access the public markets,” said Bobby Franklin, President and CEO of NVCA. You can read the full letter of support here.
“The ability to go public as an Emerging Growth Company has been a welcome boon for biotechs, and an extension of the provision will sustain the growth of the biotech industry and support the search for the next generation of medical breakthroughs,” said James Greenwood, President and CEO of BIO. You can read the full letter of support here.
Steil is a member of the following House Financial Services Committee subcommittees: Investor Protection, Entrepreneurship, and Capital Markets; Housing, Community Development, and Insurance; and Diversity and Inclusion. Steil is also a member of the Financial Services Committee Task Force on Financial Technology.