Witnesses Testify at House Hearing On Expanding Startup Capital Access

At a House Financial Services Committee hearing, witnesses testified on the need to diversify and broaden access to capital for startups in regions outside traditional financial hubs. 

In remarks at the hearing, titled "Beyond Silicon Valley: Expanding Access to Capital Across America," Chair French Hill said that concentrated venture funding limits economic potential and innovation. He pointed out the decline in public companies, attributing it to litigation threats, regulatory burdens and high costs, which discourage small businesses from going public. He advocated for reducing barriers to startup funding, incentivizing regional investment, supporting local incubators and reforming outdated regulations. 

Hearing witness Steve Case, Chair and CEO of Revolution, advocated for broadening access to startup capital beyond traditional tech hubs. He argued that innovative startups are emerging nationwide but face structural funding disadvantages. He also urged further investment in R&D at universities and national labs, especially in middle America, and endorsed immigration policies to attract skilled global talent to underserved regions. 

Hearing witness William J. Newell, Senior Business Advisor and former CEO of Sutra Biopharma, shared his company's experience as a case study for the challenges and capital needs of small biotech firms. He called for policy reforms to ease access to capital at all stages, including: (i) expanding access to private capital by reforming the definition of "accredited investor" (e.g. through the Equal Opportunity for All Investors Act) to let more knowledgeable individuals invest and (ii) supporting smaller public companies by extending the Emerging Growth Company status timeline, updating the SEC's definition of "small business" (via the Small Entity Update Act) and (iii) replacing static public float thresholds with 12-month rolling averages (as proposed in the Empowering Main Street in America Act).