Colorado U.S. Senator Michael Bennet today led a hearing of the Senate Banking Committee on ideas to better facilitate critical capital investments in small businesses and start-ups in Colorado and across the country that would help boost the economy and job creation.
The hearing highlighted a bill Bennet, along with Senator Jeff Merkley (D-OR), introduced to expand access to investments for small businesses and start-up companies by allowing them to raise capital online and through social media. The bill also provides strong investor protections aimed at minimizing fraud. Bennet’s bill is titled, The Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure (“CROWDFUND”) Act. Bennet is continuing to work to craft a consensus bill on the issue.
“These initiatives will inject capital throughout the country…in a way that we have not seen before,” said Bennet. “This really is about Main Street. We need to do everything we can do to make sure we protect the investors that will come, but I think the potential here is just enormous.”
At the hearing, of which Bennet chaired a portion, he asked Tim Rowe, founder and CEO of Cambridge Innovation Center, about who might take advantage of crowdfunding and what lessons have been learned from existing websites, such as Kickstarter.
“We’re at a position now, I think, where as a Congress, we can actually support what is the most innovative economy in the world still and drive this innovation in a way that’s actually promoting job growth here in this country and promoting wage growth in the country, the two biggest issues that the people I represent face,” said Bennet. “I wonder if you could talk a little bit about what kind of businesses you would expect to take advantage of crowdfunding if we were able to pass this. And then finally, as we look to formulate a consensus bill on crowdfunding, which I believe we can do, what thoughts do you have about the lessons that we can learn from existing websites?”
In response, Rowe predicted that everyday businesses from across the country could benefit from this ability to solicit capital online and through social media. He also highlighted the success of Kickstarter, which has enabled individuals to make donations to artists and film productions.
Small businesses are the backbone of Colorado economy with more than 530,000 Colorado small businesses employing nearly 1 million workers in 2009. With greater access to small online investments, Colorado small businesses and start-ups could flourish and provide a significant boost to the local economy.
This was the second full committee hearing on “Spurring Job Growth Through Capital Formation While Protecting Investors.”