Startup News Digest 1/13/17

Our weekly take on some of the biggest stories in startup and tech policy. To receive this weekly digest in your inbox, sign up at

Celebrating Startups Everywhere. Today, we’re launching #StartupsEverywhere, a campaign celebrating the diverse, vibrant entrepreneurial ecosystems that are taking root in every corner of the country. The project will showcase exciting developments in a variety of rising startup communities through weekly interviews with startup ecosystem leaders. The profiles will look at issues ranging from the challenges faced by these communities to the unique qualities that set them apart from traditional technology hubs. Look out for our first profile this coming Wednesday, and stay tuned for a new featured community every week. If you are interested in having your ecosystem featured, shoot an email to

House Passes HALOS Act. On Tuesday, the 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 welcomed the House passage of the bill, 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. As Engine Executive Director Evan Engstrom noted in a statement following passage of the bill, "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 This is an outdated requirement that simply does not make sense in today's environment.” We hope that the Senate will take up and pass the HALOS Act as expeditiously as possible.

Popular Legislation from Last Congress is Reintroduced. Following on the heels of a busy week last week, members continued their work reviving popular bills from last Congress. On Monday, Rep. Kevin Yoder (R-KS), Rep. Jared Polis (D-CO), and eight additional cosponsors reintroduced the Email Privacy Act, a law that would prohibit government searches of emails and other electronic communications without a warrant. An identical bill passed the House unanimously last Congress, but stalled in the Senate. In a statement, Evan argued that the bill would “restore consumer trust in both the privacy of electronic interactions and the online services that facilitate those communications, in turn, benefitting entrepreneurs and startups across the U.S.” The Senate is expected to introduce its version next week. Then on Tuesday, the bipartisan Internet of Things (IoT) working group in the Senate introduced the Developing and Growing the Internet of Things (DIGIT) Act, which calls for a “working group of federal entities that would consult with private sector stakeholders to provide recommendations to Congress." The DIGIT Act also would require that the FCC determine the spectrum needs of the growing IoT sector. Engine welcomes the introduction of these two bills and the important policy changes they espouse.

A Gig Economy Solution Proposed in New York. The debate around worker classification has beleaguered startups in the so-called “on-demand” industry since its start. Gig economy companies like Uber, Handy, and Taskrabbit classify their workers as contractors, which precludes those workers from receiving the same protections and benefits that traditional employees are given, such as minimum wage, unemployment insurance, and overtime. However, gig economy companies in New York are rallying around a new proposal that could radically change this framework. Draft legislation championed by two influential Democratic legislators would allow these companies to contribute a portion of their revenue to a new portable benefits fund that workers could tap into to purchase retirement, health insurance, and other benefits; all while maintaining the current “independent contractor” classification. The compromise legislation is supported by numerous gig economy companies in the state, who hope it can become a model that other states adopt. However, a number of union organizations have expressed concerns with the proposal, worrying that it marks a significant retreat in terms of employee protections. We’re tracking.

The Internet Association Releases New Report on the Internet Economy. According to new analysis by the Internet Association, in 2014 the internet economy comprised 6% of the U.S. GDP. The growth of the sector has been both rapid and unprecedented, with its share of GDP doubling since 2007. As its massive growth indicates, the internet differs dramatically from other sectors, the economists say. The report argues that internet-based businesses are often regulated using the same measures that were designed for industries created over a century ago, which is detrimental to both expansion and innovation. The paper proposes two updates to the existing industrial classification system to combat this oversimplification. Read the full report here.

Next Week is Copyright Week! Engine, through its membership in the Re:Create Coalition, is thrilled to take part in Copyright Week. Throughout the week, Re:Create will be profiling groups committed to pro-innovation copyright policies and sharing resources that highlight the important impact of copyright law on our everyday lives. Make sure to follow along on the Re:Create blog for updates.

Less Than a Week Left to Register AI XPRIZE Team. Do you want to change the world? The IBM Watson Artificial Intelligence XPRIZE is waiting for you. From revolutionizing healthcare to changing how children are taught, the possibilities are endless. Teams have the chance to define their own goals and projects, and will go head-to-head competing for a $5 million grand prize. The registration deadline to register as a team is January 19, 2017. More details can be found at