On Tuesday, the U.S. House of Representatives passed the Helping Angels Lead Our Startups (HALOS) Act by a vote of 344 to 73, an even wider margin of support than when the bill passed the House during the previous Congress. Engine applauds the House passage of the HALOS Act, which would clarify regulatory ambiguities around general solicitation to ensure that startups aren't unintentionally running afoul of securities laws when participating in demo days and pitch competitions.
The following statement can be attribute to Engine Executive Director Evan Engstrom:
"Pitch events are an exceedingly common occurrence and an excellent way for startups to share their ideas, connect with investors, generate buzz, and identify potential customers. However, the way securities regulations are structured, a startup could be breaking the law if they don't make sure that everyone in the audience at a demo day or pitch competition is an accredited investor. This is an outdated requirement that simply does not make sense in today's environment, where even the White House is hosting demo days. The HALOS Act would remedy this by eliminating the burdensome vetting obligation, which will make it easier for startups to meet potential seed investors and ensure that companies are able to spend their limited resources building their business, rather than worrying about whether they might accidentally be breaking the law. We urge the Senate to take up and pass this commonsense, bipartisan legislation as expeditiously as possible."