WASHINGTON -- A bill that makes it easier for start-up businesses to raise money is now law. President Barack Obama signed the rare bipartisan jobs bill into law Thursday at the White House. During the ceremony, which included both Democratic and Republican members of Congress, the president alluded to the brief rebellion led by Sen. Mary Landrieu, D-La., that almost...
President Barack Obama signs the rare bipartisan jobs bill into law at the White House.During the ceremony, which included both Democratic and Republican members of Congress, the president alluded to the brief rebellion led by Sen. Mary Landrieu, D-La., that almost derailed the measure.
Landrieu worried that the legislation would reopen the flood gates to risky businesses ventures, described as sure things, from unsuspecting investors.
It exempts companies, with assets of less than $1 billion, from a series of disclosure rules, including an independent test of their internal financial controls, for five years.
Subject to rule-making by the U.S. Securities and Exchange Commission (SEC), startups and small businesses will be allowed to raise up to $1 million annually from small-dollar investors through the internet, democratizing access to capital, according to the bill's sponsors.
One provision exempts emerging growth companies from a requirement that they seek stakeholder approval of executive compensation, including golden parachute offerings for departing executives.
Obama said new business start-ups will be closely monitored by the SEC. Looking in the direction of House Majority Leader Eric Cantor, R-Va., the president urged Congress to make sure the SEC has the money it needs to provide oversight.
Landrieu voted against the legislation, despite a last-minute modification intended to meet some of the objections she and other Senate Democrats raised.
Landrieu said the bill would tear away from investor protections "put in place in response to the Savings and Loan scandal in the 1980's; the burst of the internet stock bubble in the 1990's; the Enron and WorldCom scandals of the early 2000's; and finally the economic crisis of 2008.'
"Winston Churchill said, 'those who fail to learn from
history are doomed to repeat it.' I'm afraid that with (this bill), we are
unnecessarily risking a repeat of the harmful impact to our economy of not
protecting those who invest their hard-earned money in
But Obama said the bill, known as the Jump-Start Our Business Start-Ups, is a "potential game changer" for new businesses looking to finance the next great new enterprise.
"America's high-growth entrepreneurs and small businesses play a vital role in creating jobs and growing the economy," Obama said. "I'm pleased Congress took bipartisan action to pass this bill. These proposals will help entrepreneurs raise the capital they need to put Americans back to work and create an economy that's built to last."